University of California
Type of paper: Thesis/Dissertation Chapter
Texas Cpa Exams Requirements
The Uniform Certified Public Accountant Examination (Uniform CPA Exam) is the examination taken by people who wish to become Certified Public Accountants in the United States. The Uniform CPA Exam is developed and maintained by the American Institute of Certified Public Accountants (AICPA), and is administered by the National Association of State Boards of Accountancy (NASBA). In order to sit for the Uniform CPA Exam, a person must be declared eligible to do so by one of the 55 state boards of accountancy in the United States. However, the requirements of state boards vary. Thus, we should do some research about the state’s requirements we plan to take.
I would like to state the results I searched as follows. They include six major topics:
* The requirements to sit for the CPA Exam;
* The requirements to become a CPA in Texas The requirements to become a CPA in Texas;
* What topics the Texas Uniform CPA Exam covers;
* Courses and options that are available to me to help study/prepare for and take the Texas Uniform CPA Exam;
* Testing windows for the Texas Uniform CPA Exam;
* Additional information such as fees and test preparation books we can use. Firstly, to become eligible to apply for the Texas Uniform CPA Exam, we must meet three requirements. To begin with, we should be of good moral character. Good moral character is demonstrated by the lack of a history of dishonest or felonious acts. When we fill in the application of intent form, we would be asked questions relating to arrests, charges, convictions, probations and/or deferred adjudications of a felony or misdemeanor. Also, the board would check and investigate our reports. Second, we should hold a baccalaureate or higher degree from a United States college or university, or an equivalent degree from an institution of higher education in another country.
Third, we should complete 150 semester hours or quarter-hour equivalents of college credit. It includes 30 semester hours or quarter-hour equivalents of upper level accounting courses, 24 semester hours or quarter-hour equivalents of upper level related business courses, and a 3-semester-hour ethics course. Secondly, although we passed four sections of the Texas Uniform CPA Exam, we may still not be a Certified Public Accountant. Except for having good moral character and passing the CPA Exams, to be a CPA in Texas, we also have meet two additional requirements. On the one hand, we need meet the qualifying work experience requirements. It is a one year of experience required and shall consist of full- or part-time employment that provides attest services or professional accounting services.
Work experience must be gained under the supervision of a CPA who is responsible for supervising, evaluating and reviewing your work. The supervising CPA must hold a current license or permit issued by this Board or by another state board of accountancy. On the other hand, we have to pass the open-book examination on the Texas Rules of Professional Conduct with a score of above 85%. The examination is mailed to the person when he or she passed the CPA exam. The Texas Uniform CPA Exam incorporates four sections, including Auditing and Attestation, Financial Accounting and Reporting, Regulation, and Business Environment and Concepts. Firstly, The Auditing and Attestation section (AUD) covers knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements, and the skills needed to apply that knowledge in those engagements. The topics it covers and percentage allocation ranges are as follows: * Engagement Acceptance and Understanding the Assignment (12% – 16%).
* For example, the topics include determine nature and scope of engagement, consider the firm’s policies and procedures pertaining to client acceptance and continuance, establish an understanding with the client and document the understanding through an engagement letter, and identify matters related to planning and prepare documentation for communications with those charged with governance.
* Understanding the Entity and Its Environment (including Internal Control) (16% – 20%) * For example, the topics include determine and document materiality levels for financial statements, conduct and document risk assessment discussions among audit team, consideration of fraud, perform and document risk assessment procedures, consider internal control, document and understanding of the entity and its environment, assess and document the risk of material misstatements.
* Performing Audit Procedures and Evaluating Evidence (16% – 20%) * For example, the topics include develop overall responses to risks, and perform audit procedures responsive to risks of material misstatement; obtain and document evidence to form a basis for conclusions.
* Evaluating Audit Findings, Communications, and Reporting (16% – 20%) * For example, the topics include that perform overall analytical procedures, evaluate the sufficiency and appropriateness of audit evidence and document engagement conclusions, evaluate whether audit documentation is in accordance with professional standards, document the summary of uncorrected misstatements and related conclusions, and evaluate whether financial statements are free of material misstatements.
* Accounting and Review Services Engagements (12% – 16%)
* For example, the topics include plan the engagement, obtain and document evidence to form a basis for conclusions, and prepare communications.
* Professional Responsibilities (16% – 20%)
* For example, the topics include ethics and independence, and other professional responsibilities.
The second section of Uniform CPA Exam is Financial Accounting and Reporting (FAR). This section covers knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge. The topics it covers and percentage allocation ranges are as follows: * Conceptual Framework, Standards, Standard Setting, and Presentation of Financial Statements (17% – 23%)
* For example, the topics include Process by which Accounting Standards are Set and Roles of Accounting Standard-Setting Bodies, Conceptual Framework, Financial Reporting, Presentation and Disclosures in General-Purpose Financial Statements, and SEC Reporting Requirements (e.g. Form 10-Q, 10-K).
* Financial Statement Accounts: Recognition, Measurement, Valuation, Calculation, Presentation, and Disclosures (27% – 33%)
* For example, the topics include cash and cash equivalents, receivables, inventory, property, plant, and equipment, investments, intangible assets – goodwill, payables and accrued liabilities, deferred revenue, long-term debt, equity, revenue recognition, costs and expenses, compensation and benefits, and income taxes.
* Specific Transactions, Events and Disclosures: Recognition, Measurement, Valuation, Calculation, Presentation, and Disclosures (27% – 33%)
* For example, the topics include accounting changes and error corrections, business combinations, consolidation, earnings per share, extraordinary and unusual items, fair value measurements, disclosures, and reporting, derivatives and hedge accounting, impairment, interim financial reporting.
* Governmental Accounting and Reporting (8% – 12%)
* For example, the topics include Governmental Accounting Concepts, Format and Content of Comprehensive Annual Financial Report, Typical Items and Specific Types of Transactions and Events: Recognition, Measurement, Valuation, Calculation, and Presentation in Governmental Entity Financial Statements.
* Not-for-Profit (Nongovernmental) Accounting and Reporting (8% – 12%)
* For example, the topics include Typical Items and Specific Types of Transactions and Events: Recognition, Measurement, Valuation, Calculation, and Presentation in Financial Statements of Not-for-Profit Organizations The next section of Uniform CPA Exam is Regulation. This section covers knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge. The topics it covers and percentage allocation ranges are as follows: * Ethics, Professional, and Legal Responsibilities (15% -19%)
* For example, the topics include ethics and responsibilities in tax Practice, licensing and disciplinary systems, and legal duties and responsibilities.
* Business Law (17% – 21%)
* For example, the topics include agency, contracts, uniform commercial code, government regulation of business, and business structure.
* Federal Tax Process, Procedures, Accounting, and Planning (11% – 15%)
* For example, the topics include federal tax legislative process, federal tax procedures, tax return elections, tax planning, and impact of multijurisdictional tax issues on federal taxation and tax research and communication.
* Federal Taxation of Property Transactions (12% – 16%)
* For example, the topics include types of assets, basis and holding periods of assets, taxable and nontaxable sales and exchanges, related party transactions, and estate and gift taxation.
* Federal Taxation of Individuals (13% – 19%)
* For example, the topics include gross income, reporting of items from pass-through entities, adjustments and deductions to arrive at taxable income, loss limitations, filing status and exemptions, tax computations and credits, and alternative minimum tax.
* Federal Taxation of Entities (18% – 24%)
* For example, the topics include similarities and distinctions in tax treatment among business entities, C corporations, S corporations, partnerships, trusts and estates, and tax-exempt organizations.
The last section of Uniform CPA Exam is Business Environment and Concepts (BEC). This section covers knowledge of general business environment and business concepts that candidates need to know in order to understand the underlying business reasons for, and accounting implications of, business transactions, and the skills needed to apply that knowledge. The topics it covers and percentage allocation ranges are as follows:
* Corporate Governance (16% – 20%)
* For example, the topics include rights, duties, responsibilities, and authority of the board of directors, officers, and other employees and control environment.
* Economic Concepts and Analysis (16% – 20%)
* For example, the topics include changes in economic and business cycles – economic measures/indicators, globalization and local economies, market influences on business strategies, and financial risk management.
* Financial Management (19% – 23%)
* For example, the topics include financial modeling, projections, and analysis, financial decisions, capital management, including working capital, financial valuations, and financial transaction processes and controls.
* Information Systems and Communications (15% – 19%)
* For example, the topics include organizational needs assessment, systems design and other, elements, security, internet – implications for business, and types of information system and technology risks.
* Strategic Planning (10% – 14%)
* For example, the topics include market and risk analysis, strategy development, implementation, and monitoring, and planning techniques.
* Operations Management (12% – 16%)
* For example, the topics include performance management and impact of measures on behavior, cost measurement methods and techniques, process management, and project management.
As a graduate student studying for MS-Accounting program, my aim is to pass the Uniform CPA exam. Except for meet the 150 semester hours’ requirement, the courses are very helpful for preparing my CPA exam. Meanwhile, I choose the Tax track, I will balance the courses between preparing CPA exam needs and Tax courses study. Thus, I make a plan for my two year’s MS-Accounting program study. There are two parts of the course: the MPA requirements courses and electives that I can choose based on my own needs. The MPA requirements courses include ACCT 7330 Advanced Accounting, ACCT 7375 Corporate Taxation, and GENB 7304 Business Ethics for Accountants, GENB 7305 Commercial Law, and GENB 7397 Professional Communication in Today’s Business Environment. Then, I will choose five accounting electives on Tax such as ACCT 7360 Partnership Taxation, ACCT 7362 Tax Research, ACCT 7380 Advanced Corporate Taxation, ACCT 7397 Oil & Gas Taxation, and ACCT 7397 Multi-Jurisdictional Tax Issues and two other accounting courses for my CPA exam such as ACCT 7370 Advanced Auditing, and ACCT 7340 Financial Statement Analysis.
These twelve courses are very useful and helpful for my CPA exam and my future accounting career. For my Auditing and Attestation section (AUD) part of CPA exam, 7370 Advanced Auditing would assist me in studying professional auditing and accounting pronouncements, developing defensible solutions to practical situations, and developing skills for communicating solutions. I can learn to understand and write engagement letter, perform and document risk assessment procedures, consider internal control, document and understanding of the entity and its environment, Also, I am able to perform audit and obtain and document evidence and evaluate the sufficiency and appropriateness of audit evidence. Then, we can form conclusions that evaluate whether financial statements are free of material misstatements.
For my Financial Accounting and Reporting (FAR) part of CPA exam, ACCT 7330 Advanced Accounting and ACCT 7340 Financial Statement Analysis can help me review the financial part. ACCT 7330 Advanced Accounting covers accounting and reporting principles used in a variety of business entities including: accounting for merger and acquisition activities, the creation of complex business structures, foreign activities of multinational companies, reporting required for publicly traded companies, and accounting for partnerships. ACCT 7340 Financial Statement Analysis covers concepts and techniques of financial statement analysis with emphasis to business valuation using topics from accounting, finance, economics, and strategy. Topics include business strategy, profitability and risk analysis, evaluation of cash flow, and analysis of earning quality. Therefore, I can learn about conceptual Framework, Standards, Standard Setting, and Presentation of Financial Statements and Financial Statement Accounts. In addition, I would able to deal with some Specific Transactions with foreign activities of multinational companies.
For my Regulation part of CPA exam, there are lots of courses I will learn to instruct this part exam. It includes and GENB 7304 Business Ethics for Accountants, GENB 7305 Commercial Law, and ACCT 7375 Corporate Taxation, ACCT 7360 Partnership Taxation, ACCT 7362 Tax Research, ACCT 7380 Advanced Corporate Taxation, ACCT 7397 Oil & Gas Taxation, and ACCT 7397 Multi-Jurisdictional Tax Issues.
On the one hand, GENB 7304 Business Ethics for Accountants focus on origins of ethics and basis for various ethical perspectives, modern day ethical decision making and behavior, and the laws rules, and guidelines that govern the accounting professional. Notice that this course is a requirement for CPA eligibility in the State of Texas. GENB 7305 Commercial Law teaches us the basic legal principles which create the legal environment in which business is conducted in the United States. On the other hand, lots of taxation courses such as Corporate Taxation, ACCT 7360 Partnership Taxation, and ACCT 7362 Tax Research can help me understand federal tax process, procedures, tax planning, and impact of multijurisdictional tax issues on federal taxation and tax research and communication. Also, I will obtain how to calculate federal taxation for individuals and for other business entities, such as C corporations, S corporations, partnerships, trusts and estates, and tax-exempt organizations.
For my Business Environment and Concepts (BEC) part of CPA exam, I should review many courses that taken at bachelor degree level, such as Economics, Financial Management, Information Systems, and Operations Management. However, another course is very useful for me is GENB 7397 Professional Communication in Today’s Business Environment. This course can develop my understanding of communication skills in accounting. Also, it can improve my written and oral communication skills to communicate the results of accounting issues in a written and oral form, and develop your through accounting cases and situation analysis. They are very essential because we should answer essay and discussion questions in our CPA exam. However, we cannot take the CPA exam whenever we want, we have to schedule and take each section of the CPA Exam only once during a testing window. Testing windows refers that the Uniform CPA Examination is available during specific periods. The first two months of each season is an open testing window.
Therefore, there are four testing windows each year. Thus, we only can take the uniform CPA exam from January 1st to February 29th, from April 1st to May 31st, from July 1st to August 31st, and from October 1st to November 30th. We should notice that there is no test on March, June, September and December. There is no minimum number of sections that must be completed in a testing window. We may take any section in any order, and we do not have to pass one section prior to applying for another. Due to the testing window, we should schedule our test careful. Because we only have you have 18 months to pass all CPA Examination sections. The count-down to the 18 months begins when we pass your first section(s). However, if one person have failed one section of the CPA exam but has previously earned credit, look at the 18-month cycle to determine whether the person can still re-take the sections need to pass without losing credit.
Finally, let me calculate the cost of passing the whole CPA exam if we take only one section in one season and can pass it. The evaluation fee is $50, eligibility application fee for each section is $20, and thus the total is $80. Each section fee is different. The AUD is $195.35 and the BEC is $176.25. The FAR is $195.35 and the REG is $176.25. Thus, the total fees of the Uniform CPA exam are $873.2. In addition, for better review of the CPA exam, we can use some resource to assist us. Firstly, Becker is best known as the largest provider of training for candidates who are preparing to sit for the United States (US) CPA Exam in order to become Certified Public Accountants. Becker offers its CPA Exam Review in the form of books, live classes, as well as online courses, and a self-study course on disc. | | |
Board of Examiners American Institute of Certified Public Accountants, CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION, May 15, 2009
CPA Exam FAQ, NASBA, http://www.nasba.org/exams/cpaexam/examfaq/
Texas State Board of Public Accountancy, CPA Exam Sections
Texas State Board of Public Accountancy, NASBA Exam Fees
Texas State Board of Public Accountancy, Exam/Qualifications – Requirements