April 1, 2017 has come and gone, which means candidates are now officially taking the updated version of the CPA exam. These changes marked the first significant update to the CPA exam since 2011, so naturally, there was a wide range of reactions from people in the accounting industry and CPA candidates. Will the new exam be harder? Will fewer people pass the exam? What would the changes mean for those who were already in the process of taking the exam? Will fewer people even want to take the CPA exam?

As of this writing, it’s too soon to definitively know what, if any, impact the updates to the exam will have on pass rates; especially in the long run. It wouldn’t be surprising to see an initial drop in pass rates that eventually rebounds as exam review programs catch up and candidates become better prepared for the new version. But the general consensus seems to be that yes, the new CPA exam is harder. So could we be in for a more long-term decline in pass rates that ultimately creates fewer CPAs? Or could it actually create better CPAs?

When the AICPA announced these changes to the exam, their reasoning was that the exam needed to change to better reflect changes in the accounting industry. Every few years, the CPA exam is re-evaluated to make sure the material is still relevant to today’s workplace and now that so many of the tasks entry-level CPAs used to handle are either automated or outsourced, the AICPA found that new CPAs are now using higher level analytical skills, problem solving, and professional judgement earlier in their careers. Therefore, the CPA exam was changed to better test how well a candidate can apply skills to situations and gauge their communication skills, rather than their ability to memorize facts.

Most people will agree this shift inherently makes the exam more difficult. It’s more mentally taxing (no accounting pun intended) to respond to task-based simulations than it is to answer a multiple choice question, which is why the exam now takes a total of 16 hours to complete, rather than 14, and candidates now have optional breaks during the exam. But will this really lead to a crop of better CPAs down the line?

Perhaps the biggest thing the new CPA exam will reveal is whether or not many CPA candidates were relying on their ability to memorize facts to get by — and if they’ll continue to do so even with the change in focus. If there is a significant, long-term drop in the pass rate under the new exam, then perhaps the new CPA exam is helping weed out some of those people, leaving behind people who are better problem solvers. As many people have said about the changes, good memorization skills don’t necessarily make a person a good accountant. But if a lot of candidates are already going into the exam with the skills they need to handle the sims, even if they aren’t happy about the extra sims, there likely won’t be a major drop in the pass rate or the overall quality of the people who become CPAs. We’re just going to have to wait and see.

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