Preparing students for the new CPA examination.

• Author: Dennis-Escoffier, Shirley

The CPA examination is undergoing a revolution. In 2004, it will be computer-based, and the subjects and skills tested expanded. Unlike in the past, the examination will require candidates to use research tools and access authoritative literature, as they would in actual practice, rather than recounting memorized facts and details. A similar shift has been advocated by the AICPA in the Model Tax Curriculum (MTC) (see www.aicpa.org/members/ div/career/edu/introduc.htm), first issued in 1996 and revised in 1999. This column discusses how the CPA examination has changed and how the MTC's approach can help educators prepare students for the revised examination.

MTC

In 1996, an AICPA task force developed the MTC, in which it recommended changing tax course content and delivery methods to better prepare students for tax and accounting careers in the "real world." The task force developed content outlines for two undergraduate tax courses, an MBA tax elective, a Masters of Accounting program with a tax emphasis and a Masters of Science in Taxation degree. Although it concluded that most graduate-level programs adequately prepared students for the workplace, the task force recommended radically changing undergraduate courses.

Traditionally, first tax courses emphasized individual taxation; coverage of business transactions and entities was postponed until the second course. However, as a broader education was promulgated and accreditation standards changed accordingly, the emphasis on nontechnical skills caused many schools either to discontinue the second course or offer it only as an elective. Thus, the first course became the only tax course to which many students were exposed, leaving them unprepared for the realities of contemporary accounting practice.

As a solution, the task force recommended that the first course present an overview of the business entities generally encountered in both public and private practice, along with a discussion of their unique characteristics. Unfortunately, this was occasionally misinterpreted as simply incorporating a discussion of business entities into the first course, which emphasized memorization of details, rather than integration of planning, research and financial-accounting concepts from a decision-making perspective.

The MTC's five objectives for the first undergraduate tax course are:

* To introduce students to a broad range of tax concepts and types of taxpayers.

* To emphasize the role of taxation in making business decisions.

* To enable students to conduct basic tax research and planning.

* To expose students to professional standards and ethics.

* To provide students with a knowledge of the interrelationship and difference between financial accounting and tax accounting.

These objectives are consistent with the recommendations of the Accounting Education Change Commission. However, they were...