Slide 1

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 2

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 3

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 4

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 5

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 6

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 7

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 8

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 9

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 10

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 11

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 12

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 13

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 14

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 15

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 16

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 17

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 18

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 19

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 20

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 21

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 22

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 23

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 24

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 25

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 26

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 27

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 28

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 29

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 30

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 31

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 32

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 33

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 34

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 35

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 36

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 37

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 38

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 39

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 40

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 41

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 42

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 43

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 44

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 45

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 46

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 47

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 48

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 49

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 50

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 51

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 52

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 53

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????


Slide 54

AUDITS AND
ASSURANCE SERVICES
The Attest Function
Chapter 1

Attestation services
To help improve the reliability and
relevance of information
Types:
Audit of financial statements –
expressing an opinion about
whether the financial statements
are in conformity with GAAP
 Review of financial statements
 Agreed upon procedures


Non - Attestation services
Types:
Accounting
 Bookkeeping services
 Tax services
 Management consulting services
 Litigation support
 Fraud investigation
 Personal financial planning


Economic Demand for Auditing
Business risk – risk associated with
a company’s survival and
profitability
Information risk – reflects the
possibility that the information
upon which the business risk
decision was made was
innacurate. Causes are:
Remoteness of information
 Biases and motives of provider
 Voluminous data
 Complex exchange transactions


Nature of Auditing
Auditing is the accumulation and
evaluation about information to
determine and report on the
degree of correspondence
between the information and
established criteria. Auditing
should be done by a competent,
independent person.

Types of Audits






Financial statements audits - to
determine whether the overall financial
statements are stated in accordance
with GAAP
Operational audits – to review any part
of an organization’s operating
procedures and methods for the
purpose of evaluating EFFICENCY &
EFFECTIVENESS
Compliance audits – to determine
whether the auditee is following specific
procedures, rules, or regulations set by
some higher authority

Types of Auditors









Certified public accountants – all
types of audits
General Accounting Office –
compliance and operational audits
Contralor de PR – compliance audits
Auditores de Hacienda – compliance
audits
Internal auditors – compliance and
operational audits

The CPA Profession
Certified Public Accounting Firms:


Big Four:
Ernst & Young
 Price Waterhouse Coopers
 KPMG
 Deloitte and Touche


National firms
 Regional firms
 Small local firms
 Kiosks


Organizational Structure of a
CPA Firm






Proprietorship
Partnership
Limited liability partnership
Professional corporation

Staff Levels and
Responsibilities
Staff – 0-2 years. Performs most of the
detailed audit work. $40,000
Senior – 2-5 years. Coordinates and is
responsible for the field work,
including supervision. $45,000$50,000
Manager – 6-10 years. Helps senior
and manage the audit. $60,000$85,000
Partner – Reviews the overall audit
work, client’s relationship (tennis &
golf). $100,000 - $250,000

American Institute of Certified
Public Accountants










Voluntary membership
Standards and rules
Code of professional conduct
Professional requirements for CPA’s
Prepares and grades the exam
Publishes the Journal of
Accountancy
Conducts research
Advocate for the accounting
profession

Securities and Exchange
Commission








Agency of the federal government
Assist in providing investors with
reliable information upon which to
make investment decisions
Requires audited financial
statements every year
Requires unaudited quarterly
financial statements every quarter
Sets generally accepted accounting
principles and disclosures
Watchdog

Salaries by Age & Certification
19-29
30-39





40-49



50-59



Overall



$31,068
$44,133
$56,024
$58,920
$73,638
$51,831








$38,583
$59,346
$75,136
$90,389
$81,367
$69,322

THE NEW CPA EXAM

CPA JUAN M. GARCIA MERCED

4 PARTS of the CPA EXAM






Auditing
Financial Accounting and Reporting
Regulation
Business Environment and Concepts

Effective date: April 2004

AUDIT

100% Auditing & Attestation

Financial Accounting &
Reporting
80% Business enterprises
10% Governmental entities
10% Not for profit organizations

Regulation

60% Taxation
40% Law and
professional
responsibilities

Business Environment &
Concepts

20% Business structure
10% Managerial (measurement)
70% All areas other than
Business structure and
measurement
40% of the content was not
previously tested on the
CPA exam

Testlet Approach


FAR, AUD, and REG will each
contain 5 testlets; 3 multiplechoice and two simulations
FAR and AUD = 90 M/C
 REG = 72 M/C




BEC will be three testlets of all
multiple-choice questions (90
total).

Multiple-Choice Testlets






Answers are radio button
approach (not A, B, C, D).
Calculator onscreen is only
available calculator.
Candidate must complete
testlets in order and cannot
move ahead or back.

Simulations




Each simulation is
approximately 20-40 minutes
in length and will complement
the multiple choice portion
Most of the simulation will
contain some research
activity, usually involving an
electronic search or access to
authoritative literature or IRS
documents

Simulations
Candidates are expected to
know how to use common
spreadsheet and word
processing functions,
including writing formulas for
spreadsheets

Simulations




Candidates must also have
the ability to use a financial
calculator or a spreadsheet to
perform standard financial
calculations
Candidates will be asked to
use authoritative literature in
the creation of formal audit
communications

Comprehensive Assessment




Entry-level foundational
knowledge (standards and
regulations)
Entry-level skill sets
(communication, research,
analysis and organization,
understanding and judgment

Length of New Exam

Examina
tion
Length
14 hours

Auditing
Bus.
&
FARE Regula Environm
attestati
ent &
tion
on
Concepts
4.5
hours

4
hour
s

3
hours

2.5 hours

Granting of Credit & Transitioning






Candidates will be allowed to
sit for each section
individually, and in any order
Candidates will retain credit
for any section(s) passed for
18 months.
Candidates will not be allowed
to retake a failed section(s)
within the same examination
window

HOW TO APPLY FOR THE
NEW CPA EXAM

The New Exam –
Administrative Changes






Calendar year divided into
quarters. Testing occurs in the first
two months of each quarter and
third month is “closed”.
Candidates can sit for one or more
parts during any testing window,
but not the same part more than
once in a testing window.
Candidates can generally sit at
any Prometric site authorized to
administer the CPA Exam.

Application Process





Key is applying early!!!
Candidates apply to CPA Examination
Services.
Expectation is that new applications will
take approximately 4-6 weeks to process
at state level. Re-examination candidates
will take considerably less time.

Application Process

EDUCATIONAL
REQUIREMENTS MUST
BE MET AT THE TIME
APPLICATIONS ARE
MADE FOR THE
EXAMINATION

Application Process – First Step
Application form (notarized)
 2 x 2 photograph
 Official transcript
 Fee payable to CPA
Examination (certified checks
or money orders only)
 Character Reference Affidavit
 A receipt indicating that a
Certificate of Good Conduct has
been requested from the Police.
The original certificate must
subsequently be mailed directly
to CPA Examination Services


Fees & Timing






Two fees: application fee and examination
fee.
Application fees $210.
Examination fees are as follows:
 AUD $187.00
 BEC $140.78
 FAR $175.44
 REG $152.33

Application Process
– Step 2
 Receive

your NOTICE
TO SCHEDULE
 This NOTICE TO
SCHEDULE is valid for
six months

Application Process
– Step 3
 Schedule

your
examination
 Have

your Notice to
Schedule ready
 As soon as possible
 Have a first, second, and
third choice of dates for
each section
 Walk in are not accepted

Application Process –
Step 3
 Options

to schedule

 Visit

www.prometric.com/cpa
(Confirmation by e-mail)
 Call 1-800-580-9648
(No confirmation)
 Call Prometric Puerto Rico

Application Process – Step 4
 Take

your Examination

 Arrive

early
 Bring your NOTICE TO
SCHEDULE
 Bring 2valid personal
identifications
 There are breaks, however,
clock will keep running
during the break!!!

Application Process – Step 5
 RECEIVE

YOUR
SCORES

Scheduling Parameters






Recommended to schedule 45
days before you want to sit.
Date chosen must be within
the time period the NTS is
valid and before it expires.
No appointments can be
made fewer than 5 days from
when you call (i.e. call
Monday earliest can sit is
Saturday).

Changing Schedules




Candidates can make
changes, but fees may apply.
If canceling (without
reschedule) or do not show,
no refunds will be issued.

Test Center Procedures








Candidates must arrive 30 minutes
before appointment time.
Candidate MUST bring NTS to the
test center.
Security measures include digital
photograph, two forms of
identification (with signature and
valid).
Specifics on types of approved
identification are found in the
Candidate Bulletin.

Test Center Regulations










All personal belongings must be placed in
a small locker at the test center.
Candidates must remain in seats except
when authorized by test center staff.
Scratch paper and pencils will be provided
to candidates.
Most items are prohibited in the testing
room. An extensive list is in the Candidate
Bulletin.
Before beginning test, Confidentiality and
Break Policy Statement must be accepted.

Scores







At start of CBT, advisory scores
and diagnostic information will
be sent by AICPA to NASBA at
the end of each testing window.
NASBA then forwards scores to
State Boards for distribution
(approximately 1 week).
State Boards then decide when
to release to candidates.
Appeal process is available.

Scoring & Weights






Questions were psychometrically
evaluated and assigned weights.
Points are accumulated based
upon correct responses. Overall
scores are then adjusted to ensure
scores for all candidates are
comparable.
75 is passing score that
represents examination
performance that represents
knowledge and skills necessary to
protect the public.

Scoring & Weights




Human graders will score all
written communication
questions.
Approximately 20% of
questions will be pretest
questions.

Questions?

Questions?????