CONTENT SPECIFICATION OUTLINES FROM THE AICPA

WHO DECIDES WHAT WILL BE ON THE EXAM?

The AICPA Board of Examiners has developed a Content Specification Outline of each section of the exam to be tested. These outlines list the areas, groups, and topics to be tested and indicate the approximate percentage of the total test score devoted to each area. The content of the examination is based primarily on the results of two national studies of public accounting practice and the evaluation of CPA practitioners and educators.

WHAT WILL BE THE ESSAY TOPICS ON THE NEXT EXAM?

Only the AICPA Board of Examiners knows, and they are not talking. The AICPA Board of Examiners does not try to make the exam predictable. We suggest candidates consider the content specification outlines and frequently tested topics (listed in our texts) and concentrate their efforts in those areas. To try to pinpoint further what will be tested in essay questions is mere speculation. As candidates must learn the subject matter in frequently tested areas to pass, regardless of question format, we recommend that you not waste time trying to second-guess the examiners.

WHAT IS THE CONTENT SPECIFICATION OUTLINE?

For Individual Sections

1. Concepts and Standards for Financial Statements (20%)
   1. Financial Accounting Concepts
   2. Financial Accounting Standards for Presentation and Disclosures in General Purpose Financial Statements
      1. Consolidated and Combined Financial Statements
      2. Balance Sheet
      3. Statement of Income and Changes in Equity Accounts
      4. Statement of Cash Flows
      5. Accounting Policies and Other Notes to Financial Statements

   3. Other Presentations of Financial Data
      1. Financial Statements Prepared in Conformity With Comprehensive Bases of Accounting Other Than Generally Accepted Accounting Principles
      2. Personal Financial Statements

2. Recognition, Measurement, Valuation, and Presentation of Typical Items in Financial Statements in Conformity With Generally Accepted Accounting Principles (40%)
   1. Cash, Cash Equivalents, and Marketable Securities
   2. Receivables
   3. Inventories
   4. Property, Plant, and Equipment
   5. Investments
   6. Intangibles and Other Assets
   7. Payables and Accruals
   8. Deferred Revenues
   9. Notes and Bonds Payable
   10. Other Liabilities
   11. Contingent Liabilities and Commitments
   12. Equity Accounts
       1. Corporations
       2. Partnerships
       3. Proprietorships

   13. Revenue, Cost, and Expense Accounts
   14. Financing, Investing, and Operating Components of Cash Flows

3. Recognition, Measurement, Valuation, and Presentation of Specific Types of Transactions and Events in Financial Statements in Conformity With Generally Accepted Accounting Principles (40%)
   1. Accounting Changes and Corrections of Errors
   2. Business Combinations
   3. Discontinued Operations
   4. Employee Benefits
      1. Deferred Compensation Agreements
      2. Paid Absences
      3. Pension Plans
      4. Postemployment Benefits Other Than Pensions
      5. Stock Purchase and Stock Option Plans

   5. Extinguishment and Restructuring of Debt
   6. Extraordinary Items
   7. Financial Instruments Requiring Recognition or Disclosure in Financial Statements
      1. Futures Contracts
      2. Concentration of Credit Risk
      3. Disclosure of Fair Values
      4. Other Contractual Obligations

   8. Foreign Currency Transactions and Translation
   9. Income Taxes
   10. Interest Costs
   11. Interim Financial Reporting
   12. Leases
   13. Lending Activities
   14. Nonmonetary Transactions
   15. Public Companies
       1. Earnings Per Share
       2. Segment Reporting

   16. Quasi-Reorganizations, Reorganizations, and Changes in Entity
   17. Real Estate Transactions
   18. Related Parties
   19. Research and Development Costs

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WHAT IS THE ARE SECTION CONTENT SPECIFICATION OUTLINE?

Accounting & Reporting Section

1. Federal Taxation--Individuals (20%)
   1. Inclusions in Gross Income
   2. Exclusions and Adjustments to Arrive at Adjusted Gross Income
   3. Deductions From Adjusted Gross Income
   4. Filing Status and Exemptions
   5. Tax Accounting Methods
   6. Tax Computations, Credits, and Penalties
   7. Alternative Minimum Tax
   8. Tax Procedures

2. Federal Taxation--Corporations (20%)
   1. Determination of Taxable Income or Loss
   2. Tax Accounting Methods
   3. S Corporations
   4. Personal Holding Companies
   5. Consolidated Returns
   6. Tax Computations, Credits, and Penalties
   7. Alternative Minimum Tax
   8. Other
      1. Distributions
      2. Incorporation, Reorganization, Liquidation, and Dissolution
      3. Tax Procedures

3. Federal Taxation--Partnerships (10%)
   1. Basis of Partner's Interest and Bases of Assets Contributed to the Partnership
   2. Determination of Partner's Share of Income, Credits, and Deductions
   3. Partnership and Partner Elections
   4. Partner Dealing With Own Partnership
   5. Treatment of Partnership Liabilities
   6. Distribution of Partnership Assets
   7. Termination of Partnership

4. Federal Taxation--Estates and Trusts, Exempt Organizations, and Preparers' Responsibilities (10%)
   1. Estates and Trusts
      1. Income Taxation
      2. Determination of Beneficiary's Share of Taxable Income
      3. Estates and Gift Taxation

   2. Exempt Organizations
      1. Types of Organizations
      2. Requirements for Exemption
      3. Unrelated Business Income Tax

   3. Preparers' Responsibilities

5. Accounting for Governmental and Nonprofit Organizations (30%)
   1. Governmental Entities
      1. Measurement Focus and Basis of Accounting
      2. Objectives of Financial Reporting
      3. Uses of Fund Accounting
      4. Budgetary Process
      5. Financial Reporting Entity
      6. Elements of Financial Statements
      7. Conceptual Reporting Issues
      8. Accounting and Financial Reporting for Governmental Organizations
         1. Governmental-type Funds and Account Groups
         2. Proprietary-type Funds
         3. Fiduciary-type Funds

      9. Accounting and Financial Reporting for Governmental Not-for-profit Organizations (Including Hospitals, Colleges and Universities, Voluntary Health and Welfare Organizations, and Other Governmental Not-for-profit Organizations)

   2. Nongovernmental Not-for-profit Organizations
      1. Objectives of Financial Reporting
      2. Elements of Financial Statements
      3. Formats of Financial Statements
      4. Accounting and Financial Reporting for Not-for-Profit Organizations
         1. Revenues and Contributions
         2. Restrictions on Resources
         3. Expenses, including Depreciation

6. Managerial Accounting (10%)
   1. Cost Estimation, Cost Determination, and Cost Drivers
   2. Job Costing, Process Costing, and Activity Based Costing
   3. Standard Costing and Flexible Budgeting
   4. Inventory Planning, Inventory Control, and Just-in-Time Purchasing
   5. Budgeting and Responsibility Accounting
   6. Variable and Absorption Costing
   7. Cost-Volume-Profit Analysis
   8. Cost Allocation and Transfer Pricing
   9. Joint and By-Product Costing
   10. Capital Budgeting
   11. Special Analyses for Decision Making
   12. Product and Service Pricing

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WHAT IS THE AUDITING SECTION CONTENT SPECIFICATION OUTLINE?

1. Auditing Section

   Plan the Engagement, Evaluate the Prospective Client and Engagement, Decide Whether to Accept or Continue the Client and the Engagement, and Enter Into an Agreement With the Client (40%)

   1. Determine Nature and Scope of Engagement
      1. Generally Accepted Auditing Standards
      2. Standards for Accounting and Review Services
      3. Standards for Attestation Engagements
      4. Compliance Auditing Applicable to Governmental Entities and Other Recipients of Governmental Financial Assistance
      5. Other Assurance Services
      6. Appropriateness of Engagement to meet Client's Needs

   2. Assess Engagement Risk and the CPA Firm's Ability to Perform the Engagement
      1. Engagement Responsibilities
      2. Staffing and Supervision Requirements
      3. Quality Control Considerations
      4. Management Integrity
      5. Researching Information Sources for Planning and Performing the Engagement

   3. Communicate With the Predecessor Accountant/Auditor
   4. Decide Whether to Accept or Continue the Client and Engagement
   5. Enter Into an Agreement With the Client as to the Terms of the Engagement
   6. Obtain an Understanding of the Client's Operations, Business, and Industry
   7. Perform Analytical Procedures
   8. Consider Preliminary Engagement Materiality
   9. Assess Inherent Risk and Risk of Misstatements
      1. Errors
      2. Fraud
      3. Illegal Acts by Clients

   10. Consider Internal Control
       1. Obtain and Document an Understanding of Internal Control—Automated and Manual
       2. Assess Control Risk
       3. Consider Limitations of Internal Control
       4. Consider the Effects of Information Technology on Internal Control
       5. Consider the Effects of Service Organizations on Internal Control

   11. Consider Other Planning Matters
       1. Using the Work of Other Independent Auditors
       2. Using the Work of a Specialist
       3. Internal Audit Function
       4. Related Parties and Related Party Transactions
       5. Electronic Evidence

   12. Identify Financial Statement Assertions and Formulate Audit Objectives
       1. Accounting Estimates
       2. Routine Financial Statement Balances, Classes of Transactions, and Disclosures
       3. Unusual Financial Statement Balances, Classes of Transactions, and Disclosures

   13. Determine and Prepare the Work Program Defining the Nature, Timing, and Extent of the Auditor's Procedures

2. Obtain and Document Information to Form a Basis for Conclusions (35%)
   1. Perform Planned Procedures Including Planned Applications of Audit Sampling
      1. Tests of Controls
      2. Analytical Procedures
      3. Confirmation of Balances and/or Transactions With Third Parties
      4. Physical Examination of Inventories and Other Assets
      5. Other Tests of Details
      6. Computer Assisted Audit Techniques
      7. Substantive Tests Prior to the Balance Sheet Date
      8. Tests of Unusual Year-End Transactions

   2. Evaluate Contingencies
   3. Obtain and Evaluate Lawyers' Letters
   4. Review Subsequent Events
   5. Obtain Representations From Management
   6. Identify Reportable Conditions and Other Control Deficiencies
   7. Identify Matters for Communication With Audit Committees

3. Review the Engagement to Provide Reasonable Assurance That Objectives are Achieved, and Evaluate Information Obtained to Reach and to Document Engagement Conclusions (5%)
   1. Perform Analytical Procedures
   2. Evaluate the Sufficiency and Competence of Audit Evidence and Document Engagement Conclusions
      1. Consider Substantial Doubt About an Entity's Ability to Continue as a Going Concern
      2. Evaluate Whether Financial Statements Are Free of Material Misstatements
      3. Consider Other Information in Documents Containing Audited Financial Statements

   3. Review the Work Performed to Provide Reasonable Assurance That Objectives Are Achieved

4. Prepare Communications to Satisfy Engagement Objectives (20%)
   1. Prepare Reports
      1. Reports on Audited Financial Statements
      2. Reports on Reviewed and Compiled Financial Statements
      3. Reports Required by Government Auditing Standards
      4. Reports on Compliance With Laws and Regulation
      5. Reports on Internal Control
      6. Reports on Prospective Financial Information
      7. Reports on Agreed-upon Procedures
      8. Reports on Other Assurance Services
      9. Reports on the Processing of Transactions by Service Organizations
      10. Reports on Supplementary Financial Information
      11. Other Special Reports
      12. Reissuance of Auditors' Reports

   2. Prepare Letters and Other Required Communications
      1. Errors and Fraud
      2. Illegal Acts
      3. Special Reports
      4. Communication With Audit Committees
      5. Other Reporting Considerations Covered by Statements on Auditing Standards and Statements on Standards for Attestation Engagements

   3. Other Matters
      1. Subsequent Discovery of Facts Existing at the Date of the Auditor's Report
      2. Consideration of Omitted Procedures After the Report Date

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WHAT IS THE BLPR SECTION CONTENT SPECIFICATION OUTLINE?

Business Law & Professional Responsibilities Section

1. Professional and Legal Responsibilities (15%)
   1. Code of Professional Conduct
   2. Proficiency, Independence, and Due Care
   3. Responsibilities in Other Professional Services
   4. Disciplinary Systems Within the Profession
   5. Common Law Liability to Clients and Third Parties
   6. Federal Statutory Liability
   7. Privileged Communications and Confidentiality

2. Business Organizations (20%)
   1. Agency
      1. Formation and Termination
      2. Duties of Agents and Principals
      3. Liabilities and Authority of Agents and Principals

   2. Partnership and Joint Ventures
      1. Formation, Operation, and Termination
      2. Liabilities and Authority of Partners and Joint Owners

   3. Corporations
      1. Formation and Operation
      2. Stockholders, Directors, and Officers
      3. Financial Structure, Capital, and Distributions
      4. Reorganization and Dissolution

   4. Estates and Trusts
      1. Formation, Operation, and Termination
      2. Allocation Between Principal and Income
      3. Fiduciary Responsibilities
      4. Distributions

3. Contracts (10%)
   1. Formation
   2. Performance
   3. Third-Party Assignments
   4. Discharge, Breach, and Remedies

4. Debtor-Creditor Relationships (10%)
   1. Rights, Duties, and Liabilities of Debtors and Creditors
   2. Rights, Duties, and Liabilities of Guarantors
   3. Bankruptcy

5. Government Regulation of Business (15%)
   1. Federal Securities Acts
   2. Employment Regulation
   3. Environmental Regulation

6. Uniform Commercial Code (20%)
   1. Commercial Paper
   2. Sales
   3. Secured Transactions
   4. Bailments and Documents of Title

7. Property (10%)
   1. Real Property
   2. Personal Property
   3. Fire Insurance