The word is out that the CPA Evolution exam takes effect January 2024. According to the AICPA, the Evolution CPA exam will provide for a strong core in accounting, auditing, tax, and technology and a deeper knowledge in one of three disciplines: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP). Audrey Katcher, CPA/CITP, CGMA, AICPA Board of Examiners indicates that the overall purpose is “…to embrace what’s changing in the profession and the business environment and the skills a newly licensed CPA will need to possess for licensure.” Evolution expects to reflect the reality of practice and for TCP, that is knowing tax law and tax planning strategies.

The AICPA Evolution blueprint for the exam is expected in early 2023 following the practice analysis during mid-2022. Until these documents are released, the Model Curriculum (MC) is used as a guide as the likely curriculum for the requisite knowledge and skills necessary for candidates to master and pass the exam. Much has been written about the MC and the accountancy discipline, which includes guidance for curriculum changes, viewing accounting as a service discipline rather than a unique major, declining student enrollments, and number of candidates entering the profession. This article focuses on Evolution and its potential impact on future enrollments in the Masters in Tax (MST) in New York state.

In October 2020, NASBA and the AICPA collaborated to produce The Uniform Accountancy Act (UAA) (NASBA 2020).  The UAA guides students, educators, and regulators for the education needed for Evolution. The UAA established quality standards for educational institutions and established guidance to ease jurisdiction candidate review for exam qualifications. The UAA does not address exam "sit" or licensure requirements, leaving those decisions up to the licensing jurisdictions. Section 5 of the January 2018 AICPA/NASBA Uniform Accountancy Act Standards for Regulation states: “The education requirements for a certificate, which must be met before an applicant is eligible to apply for the examination prescribed in subsection (d), shall be at least 150 semester hours of college education…" (NASBA 2020).

The New York State Board of Public Accountancy Education Committee at its most recent meeting in October 2021 provided recommendations for education regulations that include transition recommendations for new education requirements for Evolution licensure programs, and pre- and post-Evolution exams. The more significant changes include education recommendations to require a bachelor's degree in accounting or business with at least 24 semester hours of accounting course work completed or a master's degree in accounting or business with at least 21 semester hours of accounting course work in the graduate degree. The Committee also recommended an increase to the core to five core courses: Financial Accounting Reporting, Auditing and Attestation, Taxation, Cost/Managerial, and Accounting Information Systems (AIS). Except for Cost/Managerial. Core courses must be taken at the junior, senior, or graduate levels. AIS was recently added by the Committee to the core. These education requirements are housed within the 150 credits required for licensure; as of this writing, recommendations for minimum sit requirements are yet addressed.

The MC and the TCP Discipline

Exhibit 1 summarizes the MC. Core knowledge in Accounting and Data Analytics, Audit and Accounting Information Systems and Tax in the aggregate covers 438 learning objectives with 231 to 418 hours of instruction, which is equivalent to approximately six to ten courses typically taken at the undergraduate level. The TCP discipline covers 181 learning objectives requiring 68 to 145 hours or two to four courses that would be most likely taken at the graduate level. Graduate programs that permit flexibility for candidates to select requisite courses aligned with a discipline could be the most efficient pathway to attain the Evolution knowledge. Although the TCP learning objectives seem daunting relative to those in the BAR and ISC disciplines, TCP in terms of maximum hours is approximately 28% less than BAR and 27% more than ICP.

CPA Evolution: The Model Curriculum

Exhibit 1

The Masters in Tax in NYS

According to Integrated Postsecondary Education Data System (IPEDs), ten institutions reported MST degrees completed for the eleven years through 2020. Of the ten institutions, eight are in the downstate area; the two remaining are in Syracuse and Albany.  Seven are private and three are from public institutions. Exhibit 2 shows the MST degrees completed over the eleven-year span. Although 2020 shows a small increase from 2019, the 2020 degrees completed declined approximately 26% from their peak in 2015.

Exhibit 2
Data Source: IPEDS

Exhibit 3 isolates the MST degrees completed by institution. Although CUNY Baruch still awards the most MST, it has experienced significant declines since 2014 and thus accounts for the significant overall decline in MST degrees completed. Private institutions Fordham and St. John's University are showing increasing results in spite of higher tuition costs relative to the CUNY system.

Exhibit 3
Data Source: IPEDS

Conclusions

In the aggregate, the MC is an ambitious program not only for an incoming college student to pursue; it also challenges the education institution to secure resources to deliver the curriculum. Educational institutions that plan to deliver core plus all three disciplines will need to schedule approximately a minimum of 35 to a maximum of 63 courses. Although it remains to be seen which discipline candidates will pursue, it is reasonable to conclude, given the demand for candidates experienced with audit-related technologies and the seemingly limited exam content for the discipline as shown in Exhibit 1, ISC should prevail as the discipline of choice. Similarly, given the estimated courses to learn the knowledge for the TCP discipline, it is reasonable to conclude that a typical MST program goes well beyond the requisite knowledge for the Evolution exam. Ultimately, each institution will determine the most efficient program path to deliver Evolution. Enrollment trends  for the MST and accounting overall will pressure program leaders to make difficult decisions unless Evolution lives up to the demand as is anticipated.

Nina Terranova-Dorata, PhD, CPA, is a professor of accountancy at St. John's University in Jamaica, N.Y.