It’s hard to imagine now, but for CPAs of a certain age, taking the American Institute of Certified Public Accountants’ (AICPA) CPA exam often meant crowding into a large space—say, a hotel ballroom or a chicken barn at a state fairgrounds—with lots of other people. Back then, as now, sitting for the CPA exam could be a challenging rite of passage, steeped in pressure. Candidates took the rigorous multi-part test over the course of several days on paper, armed only with a handful of number two pencils and a calculator.
And to really give it that spicy anxiety flavor, AICPA only offered the test twice a year, which meant candidates had to be ready to go on the AICPA’s timeline, and failing the exam could seriously delay your career.
Scheduling and exotic locations aside, taking the CPA exam also meant remembering vast amounts of complicated accounting rules, regulations, procedures, and practices. Which was fine in an era when accountants were tasked with rote, manual tasks like bookkeeping, invoicing, and reconciliations.
But the combination of increased computerization and technology adoption in the workplace, and the new regulatory requirements stemming from the Enron collapse, meant that the accounting profession was changing. And the CPA exam needed to change with it.
Pen and paper. Before the 1980s, much of an accountant’s work “didn’t require a lot of analytical thinking,” according to Colleen Conrad, former EVP and COO of the National Association of State Boards of Accountancy (NASBA). But in the 1980s, she said, the introduction of software programs like Excel and advances in computers began taking over some of those manual tasks accountants once performed, and by the 1990s, technology changed the skills that accountants needed.
That meant that a paper CPA exam could no longer capture everything a new accountant needed to know.
In response, in April 2004 the AICPA launched a new, computerized exam that focused more on analysis, judgment, research, and communication over rote memorization of accounting rules and principles.
Today’s exam is less about “just remembering this piece of information” than it is about applying critical thinking to that information, according to Rick Niswander, professor emeritus of accounting at East Carolina University and a former member of the AICPA’s Board of Examiners, the body that creates and evaluates the CPA exam. “It’s ‘Given that piece of information, what does that mean? What does that imply?’ And you can’t get there if you don’t have a computerized exam,” Niswander said.
Remember and recall. The move to computerize the exam was a dramatic change in how the test was taken along with a sea change in what new CPAs needed to know.
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One of the major changes to the 2004 exam was the addition of task-based simulations, which presented more dynamic testing options than the traditional static items on the paper test. This allowed candidates to be tested on real-world situations, according to Conrad, who was deeply involved in the computerization of the CPA exam as a member of the AICPA’s Board of Examiners at the time.
Task-based simulations, she said, “equated to somebody using something like Excel to do their work, and to research and to look things up,” she said. “It was a nod to how the people should be doing that work.”
For her, the move to a computerized CPA exam had multiple benefits: candidates could take the exam throughout the year, freeing them from the pressures of a rigid timeline; firms no longer had to give large groups of candidates time off at the same time; and exam takers received their scores quicker.
For Niswander, the computerized test’s ability to gauge more analytical skills marked the beginning of the profession’s transition away from manual tasks into a more strategic and advisory role.
“That’s one of the ways that it changed around that time of computerization and has continued to change,” he said. “You let some of the busywork go away.”
Constant evolution. The 2004 computerization of the CPA exam was a process that lasted for more than 10 years, according to Niswander.
“The movement to what we think of now as a computerized exam was really a process from about 2004 all the way through 2015,” he said. “It was clear evidence that the exam had moved into the 21st century.”
As technology has advanced in the last 20 years, the CPA exam, and the work expected of accountants, continues to evolve. The AICPA regularly engages in what it calls a “practice analysis,” a multiyear process that researches the skills and knowledge base that accounting supervisors and new accountants think accountants in the first one to two years of their career need to know.
The AICPA continues to change and modify the CPA exam. In 2024, 20 years after the first computerized test, the AICPA and NASBA launched CPA Evolution, which includes a new exam to address “exponential growth in technology, data, new rules, concepts, and standards, along with changes in the roles and responsibilities of newly licensed CPAs.”
Proving the old adage, “the more things change, the more they stay the same.”
This is one of the stories of our Quarter Century Project, which highlights the various ways industry has changed over the last 25 years. Check back each month for new pieces in this series and explore our timeline featuring the ongoing series.
