CPA Exam Expert

Dear CPA Exam Expert,

I passed all four parts of the CPA exam using Roger’s course so that part is taken care of but I’m having some trouble with the ethics exam. In some ways I feel this is harder than taking the actual exams! Do you have any advice?

Ahhh, ethics. Firstly, if you’ve got an extra minute or two I highly recommend a recent post from the Maryland Association of CPAs’ CPA Success called Does studying ethics make you ethical? for additional insight into the matter. As you can tell from the post, this subject seems always up for debate in the accounting industry.

What makes one ethical? Is it limited to the AICPA Code of Professional Conduct or are there additional responsibilities that are implied by the designation “CPA”? What are CPAs’ top responsibilities?

Well this goes back to the very first CPA:

Long, long ago, men discovered the need to account for their goods, services and currency. They needed a trustworthy person who could crunch numbers, count beans, and develop spreadsheets. Thus, the accountant was born.
Flash forward several thousand years...
The first CPA was a New Yorker named Frank Broaker. After losing a lawsuit to a client who refused to pay his rate of $3.00 per hour for bookkeeping services, Mr. Broaker used his political savvy to shepherd a bill through the NY senate, officially recognizing accountants as professionals worthy of their own designation and licensure. Finally, the world had its first Certified Public Accountant.

Thank you, Mr Broaker for introducing responsibility to the public (and the client’s responsibility to his or her accountant!) but we’ve come quite a ways since the days of $3/hr bookkeeping services.

Sadly, the CPA Exam Expert has to admit here that there are no “quick fixes” with the AICPA Professional Ethics Exam (or if you are in CA, FL, NC, PA or TX, your state's ethics exam). 

Some hints for getting through it:

Take it slow: in most states, you can start the ethics exam before you have actually completed the CPA exam (usually the exams themselves are good for one year, giving you A WHOLE YEAR to finish an open book exam, don’t you wish FAR was like that?!)

Take advantage of free resources: The Washington Society of CPAs has an “Ask the Expert” section on their site devoted to helping WACPA members who are struggling with the ethics exam. If you aren’t in WA, check with your state board, state society of CPAs, and/or school accounting department head to see if similar resources are available for your state.

Find a study buddy: the ultimate irony of the ethics exam is that oftentimes Big 4 new hires who are working on the CPA exam at the same time end up sharing answers (we won’t elaborate). We certainly don’t recommend starting your career off by cheating on the ethics exam (nor do we ever recommend cheating!!) but we do feel like some candidates do better with friends. Find someone in your firm or from your school who is also taking it for support and guidance.

Don’t sweat the small stuff: Come on, you are a future CPA! Ethics should come as naturally as breathing! Read the questions slowly and carefully and listen to your instincts. If you ever get stuck, search through the AICPA Code of Professional Conduct for tips.

Hope this helps and best of luck,

The CPA Exam Expert

For more on ethics, check out Roger’s blog!

For current CPAs who are feeling a little queasy on the ethics front and in need of some CPE, the AICPA offers courses on Professional Conduct for CPAs, or you can check with your State Society of CPAs for more options.

If you have a question for the CPA Exam Expert, go ahead and email post@cpaexamexpert.posterous.com and we’ll be happy to get you an answer!

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CPA Exam Expert,

Since the California Board of Accountancy is closed 3 Fridays a month, how long will it now take to get a NTS ? Are there any other delays we can expect?

Amber Buck, Frank Rimerman + Co, Bay Area, CA (via Facebook)

Great question, Amber! There are a few factors at work here that will likely affect California CPA Exam applicants for the immediate future that we need to point out.

The first is Executive Order S-13-09:

WHEREAS the global recession has caused California's revenues to continue to plummet, leaving our state with an unprecedented budget deficit that forces the State to take drastic actions that will affect every Californian; and

WHEREAS on December 19, 2008, I issued Executive Order S-16-08, in which I ordered the Department of Personnel Administration (DPA) to: (1) initiate the layoff process for state civil service employees effective January 1, 2009 through June 30, 2010; and (2) adopt a plan to implement a furlough of two days per month effective February 1, 2009 to June 30, 2010

This means most state offices, including the California Board of Accountancy, are now closed three Fridays out of the month. For the most part, these additional closures have not affected the level of service CPA Exam applicants receive from the Board but it is certainly causing delays, which we’ll get to momentarily.

The second factor adding to application process time is actually good news for CPAs; many are flocking to the perceived “safety” of the CPA designation. Reports are that the accounting industry is about 12 months behind the global recession and though all areas of the global economy have been hit by the events of the last two years, CPAs are still in high demand. This means many who chose not to pursue licensure after college are now starting to turn back to the CPA as a wise career choice simply because of the economic peace of mind of a title that will always be both prestigious and necessary.

So to answer your question, Amber, first-time CPA Exam applicants in California can expect a turn-around time of about 11 weeks last we heard. Repeat applicants can expect to wait about 2 weeks.

We are sure the California State Board of Accountancy is doing the best it can to keep up with demand despite additional furloughs and that they are working to provide applicants with the same level of service they always have despite these new, complicated conditions.

Remember if you are applying in any state for the CPA exam that you can cut down on delays by submitting the correct paperwork the first time, thoroughly reading through state requirements to be sure you meet them before sending in your application, and by having all of your educational units sent to your State Board promptly.

Hope this answers your question, Amber!

If you have a question for the CPA Exam Expert, go ahead and email your question to post@cpaexamexpert.posterous.com and we’d love to answer it for you!

Best of luck,

The CPA Exam Expert

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CPA Exam Expert,

I'm feeling nervous about what state to apply for the exam in how long does it take to move certifications from state to state.

Help!

There’s nothing to be nervous about!

Most candidates choose licensure in their home state of course but if mobility is an issue – which it most certainly should be in these unsure times – your best bet is to choose a state that allows for the easiest transfer of licensure. This means going with the state that has more stringent requirements to sit for the CPA exam.

Keep in mind that it is often easier to complete the exam in your original state of application and then transfer your license – as long as you meet the requirements of the state you are transferring to, you should be ok. When in doubt, always check with your state board to be sure. (here’s a handy list of state boards from the Roger CPA Review website just in case!)

Mobility is a hot button issue in accounting and will continue to be debated by legislators and the good news is that the AICPA is on top of their game as usual:

There is significant momentum across the country to enact a uniform practice mobility system for certified public accountants (CPAs) and CPA firms. A majority of states are in the process of considering this concept. View an overview of the activity.

Practice mobility for CPAs is the ability of a licensee to gain a practice privilege outside of his or her home jurisdiction without obtaining an additional license in another state where he or she will be serving a client or an employer.

Because the electronic age makes conducting business across state borders an everyday occurrence, a national effort is underway to adopt a uniform system that will allow licensed CPAs the ability to provide services across state lines without being subject to unnecessary burdens that do not protect the public interest.

So our suggestion? Don’t worry too much about that right now while you’re preparing for the CPA exam. Since mobility is a high priority for most states, it is likely that by the time you complete your journey to licensure, you’ll have more options than ever.

Best of luck,

The CPA Exam Expert

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