If you are currently planning and studying for the CPA Exam, you should be well aware of the imminent CPA Exam changes effective January 1, 2011. I can understand the concern surrounding the changes, and therefore, I would like to share with you these 3 important points you should be aware of in this aspect.

1. CPA Exam Changes On The Content

The number one change you should know is how the content is going to be changed in the new exam. The major addition is going to be the inclusion of IFRS (stands for International Financial Reporting Standard) and it is going to hit FAR the most, followed by AUD and BEC.

You may be interested to know that REG will get none of this IFRS topics. As you may aware, the convergence of US GAAP-IFRS is almost but not yet complete, so the US companies are still very new to this international accountant standard. Therefore, the tax implication on US companies remains to be seen. That’s why the CPA examiners decide to postpone the inclusion of this topic to REG, which primarily covers federal taxation.

At the same time, you can also expect an increased emphasis on ethics as pointed out in the Spring 2010 CPA exam bulletin.

2. CPA Exam Changes On The Format

There will also be some differences when it comes to the format of the exam. First of all, the written communications tab will be taken away from FAR, AUD and REG. Well, before getting too excited about this, please note that BEC will have 3 written communications questions.

Another relatively big change is on CPA simulations. Sims will continue to be absent from BEC. For FAR, AUD and REG, the 2-3 long simulations that we currently have will be divided up into 6-7 shorter simulations. In a way I welcome the idea to have shorter simulations but we will have to look at the actual exams to see if it will be easier to handle when compare to the current version.

Overall, simulations will become more important in the new CPA exam: 40% of questions will be sims vs. the current 30%. In other words, 60% comes from multiple choice questions vs. the current 70%.

For BEC, instead of 100% multiple choice questions, there will be 85% MC questions and 15% from written communications questions. There will still be 3 testlets but the number of MC questions in each testlet will be reduced from 30 to 24, i.e. same as the other 3 sections of the exam.

3. CPA Exam Changes On The Duration

Many candidates have trouble completing FAR, so everyone was expecting the examiners to lengthen the duration of this part of the CPA exam. The fact is, no, it will be kept at 3.5 hours. However, given the additional written communications, BEC exam will become longer for 3 hours, while AUD will be shorter for 4 hours. The aggregate number of hours for all parts of the exam remains to be 14 hours.

Other Changes

You can also expect new tools such as new online calculator and a “spreadsheet”, which you’ll be able to practice on in the tutorial and sample question section in the official CPA Exam once they become available in early fall of 2010.