Transcript how to apply for the new cpa exam
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?????
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?????