CPA Exam Blueprints – January 2019

Transcript

1 Uniform CPA Examination Blueprints Approved by the Board of Examiners American Institute of CPAs May 31, 2018 Effective date: Jan. 1, 2019 Uniform CPA Examination Blueprints i

2 Uniform CPA Examination Blueprints Table of contents FAR1 Introduction: Uniform CPA Examination Blueprints 2 Financial Accounting and Reporting (FAR) Section introduction FAR2 Summary blueprint FAR6 AUD1 Auditing and Attestation (AUD) Area I — Conceptual Framework, Standard-Setting FAR7 AUD2 Section introduction and Financial Reporting Summary blueprint AUD6 FAR13 Area II — Select Financial Statement Accounts AUD7 Area I — Ethics, Professional Responsibilities Area III — Select Transactions FAR19 and General Principles Area IV — State and Local Governments FAR24 Area II — Assessing Risk and Developing AUD12 a Planned Response Area III — Performing Further Procedures AUD18 REG1 Regulation (REG) and Obtaining Evidence REG2 Section introduction Area IV — Forming Conclusions and Reporting AUD23 REG5 Summary blueprint REG6 Area I — Ethics, Professional Responsibilities Business Environment and Concepts (BEC) BEC1 and Federal Tax Procedures Section introduction BEC2 REG8 Area II — Business Law BEC6 Summary blueprint Area III — Federal Taxation of Property Transactions REG12 BEC7 Area I — Corporate Governance Area IV — Federal Taxation of Individuals REG15 Area II — Economic Concepts and Analysis REG18 Area V — Federal Taxation of Entities BEC9 Area III — Financial Management BEC11 Area IV — Information Technology BEC13 BEC15 Area V — Operations Management Uniform CPA Examination Blueprints 1

3 Introduction Introduction Uniform CPA Examination Blueprints The AICPA has adopted a skill framework for the Exam based on the revised The Uniform CPA Examination (the Exam) is comprised of four sections, each Bloom’s Taxonomy of Educational Objectives. Bloom’s Taxonomy classifies a four hours long: Auditing and Attestation (AUD), Business Environment and continuum of skills that students can be expected to learn and demonstrate. Concepts (BEC), Financial Accounting and Reporting (FAR) and Regulation (REG). Approximately 600 representative tasks that are critical to a newly licensed The table below presents the design of the Exam by section, section time and CPA’s role in protecting the public interest have been identified. The question type. representative tasks combine both the applicable content knowledge and skills required in the context of the work of a newly licensed CPA. Based on the nature Written Task-based Multiple-choice Section of a task, one of four skill levels, derived from the revised Bloom’s Taxonomy, Section time questions (MCQs) simulations (TBSs) communication was assigned to each of the tasks, as follows: 72 8 4 hours — AUD 4 BEC 4 hours 62 3 Skill levels — 66 8 FAR 4 hours The examination or assessment of problems, and Evaluation use of judgment to draw conclusions. REG — 4 hours 76 8 The examination and study of the interrelationships of separate areas in order to identify causes and find Analysis The table below presents the scoring weight of multiple-choice questions evidence to support inferences. (MCQs), task-based simulations (TBSs) and written communication for each Exam section. The use or demonstration of knowledge, concepts Application or techniques. Score weighting The perception and comprehension of the Remembering and significance of an area utilizing knowledge gained. Understanding Multiple-choice Written Task-based questions (MCQs) Section communication simulations (TBSs) — 50% 50% AUD BEC 35% 50% 15 % — FAR 50% 50% — 50% 50% REG Blueprints Uniform CPA Examination 2

4 Introduction (continued) Uniform CPA Examination Blueprints The purpose of the blueprint is to: The skill levels to be assessed on each section of the Exam are included in the table below. • Document the minimum level of knowledge and skills necessary for initial licensure. Remembering and • Assist candidates in preparing for the Exam by outlining the knowledge and Section Evaluation Understanding Application Analysis skills that may be tested. 5 –15 % 15–25 % 30–40% 30–40% AUD • Apprise educators about the knowledge and skills candidates will need to function as newly licensed CPAs. — 50–60%* 15–25 % BEC 20–30% • Guide the development of Exam questions. 50–60% — 10–20% 25–35% FAR The tasks in the blueprints are representative and are not intended to be (nor should they be viewed as) an all-inclusive list of tasks that may be tested on REG 25–35% 35–45% 25–35% — the Exam. It also should be noted that the number of tasks associated with a *Includes written communication particular content group or topic is not indicative of the extent such content group, topic or related skill level will be assessed on the Exam. Each section of the Exam has a section introduction and a corresponding section blueprint. • The section introduction outlines the scope of the section, the content organization and tasks, the content allocation, the overview of content areas, the skill allocation and a listing of the section’s applicable reference literature. • The section blueprint outlines the content to be tested, the associated skill level to be tested and the representative tasks a newly licensed CPA would need to perform to be considered competent. The blueprints are organized by content AREA, content GROUP, and content TOPIC. Each topic includes one or more representative TASKS that a newly licensed CPA may be expected to complete. Revised taxonomy see Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives (Complete Edition). New York: Longman. For original taxonomy see Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.J., Hill, W.H., & Krathwohl, D.R. (1956). Taxonomy of educational objectives: The classification of educational goals. Handbook 1: Cognitive domain. New York: David McKay. Uniform CPA Examination Blueprints 3

5 Uniform CPA Examination Auditing and Attestation (AUD) Blueprint Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD1

6 Section introduction Auditing and Attestation Tasks included in the AUD section blueprint may, and typically do, relate to The Auditing and Attestation (AUD) section of the Uniform CPA Examination multiple engagement types. For example, tasks related to Analytical Procedures (the Exam) tests the knowledge and skills that a newly licensed CPA must (included under Area III, Group C, Topic 1) may be performed during a: demonstrate when performing: • (including governmental entities, not- Audits of issuer and nonissuer entities — as a presumptively mandatory procedure required • Review engagement for-profit entities, employee benefit plans and entities receiving federal grants) under Statement for Accounting and Review Services No. 21 (AR-C section 90), or during an (including • Attestation engagements for issuer and nonissuer entities examinations, reviews and agreed-upon procedures engagements) • Audit engagement – during planning, as a substantive procedure, or near the • Preparation, compilation and review engagements for nonissuer entities end of the engagement to assist with forming an overall conclusion on the of interim financial information for issuer entities and reviews financial statements. Newly licensed CPAs are also required to demonstrate knowledge and skills The tasks in the blueprint are representative. They are not intended to be (nor related to professional responsibilities, including ethics, independence and should they be viewed as) an all-inclusive list of tasks that may be tested in the professional skepticism. Professional skepticism reflects an iterative process AUD section of the Exam. Additionally, it should be noted that the number of tasks that includes a questioning mind and a critical assessment of audit evidence. associated with a particular content group or topic is not indicative of the extent It is essential to the practice of public accounting and the work of newly such content group, topic or related skill level will be assessed on the Exam. licensed CPAs. Similarly, examples provided within the task statements should not be viewed as all-inclusive. The engagements tested under the AUD section of the Exam are performed in accordance with professional standards and/or regulations promulgated by Content allocation various governing bodies, including the American Institute of CPAs (AICPA), The following table summarizes the content areas and the allocation of content Public Company Accounting Oversight Board (PCAOB), U.S. Government tested in the AUD section of the Exam: Accountability Office (GAO), Office of Management and Budget (OMB) and U.S. Department of Labor (DOL). A listing of standards promulgated by these bodies, Content area Allocation and other reference materials relevant to the AUD section of the Exam, are included under References at the conclusion of this introduction. Ethics, Professional Responsibilities 15 -25% Area I and General Principles Content organization and tasks The AUD section blueprint is organized by content AREA, content GROUP and Assessing Risk and Developing a Planned Area II 20–30% Response content TOPIC. Each topic includes one or more representative TASKS that a newly licensed CPA may be expected to complete when performing audits, Performing Further Procedures and Area III 30–40% attestation engagements or accounting and review services engagements. Obtaining Evidence Area IV 15 -25% Forming Conclusions and Reporting Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD2

7 Section introduction (continued) Auditing and Attestation Overview of content areas enumerated above. These sections include the activities relevant for every type Area I of the AUD section blueprint covers several general topics, including the of engagement covered in the AUD section of the Exam, from the integrated following: audit of an issuer, to a preparation, compilation or review for a small nonissuer, — Understanding the nature and scope of • Nature and Scope of Engagements to the audit of a governmental entity. The organization of these sections follows the various types of audit and non-audit engagement types, including: the typical engagement process, from planning through reporting. - Audit Engagements — Financial statement audits as well as other types of Area II of the AUD section blueprint covers the engagement process from initial audits a newly licensed CPA may perform, such as compliance audits, audits planning to risk assessment and designing procedures responsive to risks, of internal control integrated with an audit of financial statements and audits including: of entities receiving federal grants — Understanding the engagement strategy and • Planning the Engagement Non-audit Engagements – Attestation engagements (including - developing a detailed engagement plan examinations, reviews and agreed-upon procedures engagements), Accounting and Review Services engagements (including preparation, Understanding an Entity and Its Environment and Understanding Internal • compilation and review engagements) and reviews of interim financial — Developing an understanding of an entity Controls Over Financial Reporting information and the risks associated with the engagement, understanding an entity’s internal Ethics, Independence and Professional Conduct — Requirements under the • controls, and evaluating the effect of internal controls on an engagement AICPA Code of Professional Conduct and professional and independence requirements of the Securities and Exchange Commission (SEC), PCAOB, • Assessing Risks and Planning Further Procedures — Identifying and GAO and DOL; concepts related to professional skepticism and professional assessing risks of misstatement due to error or fraud and developing judgment appropriate engagement procedures, including understanding and calculating materiality and considering specific engagement risks, as well as incorporating – Preconditions for accepting an audit or non-audit Terms of Engagement • concepts such as group audits, using the work of the internal audit function engagement and the terms of engagement and engagement letter and the work of specialists • Engagement Documentation – Requirements for engagement documentation for all types of audit and non-audit engagements Area III of the AUD section blueprint covers performing engagement procedures and concluding on the sufficiency and appropriateness of evidence obtained, – Understanding the requirements for Communication Requirements • including performing specific types of procedures (e.g., analytical procedures, communicating with management, those charged with governance, observation and inspection, recalculation and reperformance); testing the component auditors and other parties operating effectiveness of internal controls; performing tests of compliance and Quality Control – Understanding of quality control at the firm and engagement • agreed-upon procedures; understanding and responding to specific matters that levels require special consideration (e.g., accounting estimates, including fair value estimates); evaluating and responding to misstatements due to error or fraud The remaining three areas of the AUD section blueprint (Areas II, III and and to internal control deficiencies; obtaining management representations; IV) cover the activities that a newly licensed CPA must be able to perform and performing procedures to identify and respond to subsequent events and when providing professional services related to the types of engagements subsequently discovered facts. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD3

8 Section introduction (continued) Auditing and Attestation • Remembering and Understanding is mainly concentrated in Area I and Area IV. Area IV of the AUD section blueprint covers identifying the factors that an These areas contain much of the general audit knowledge that is required for auditor, accountant or practitioner should consider when reporting on auditing, newly licensed CPAs. In Area IV, many of the tasks relate to reporting and are attestation, compilation, review or compliance engagements, when performing driven by templates and illustrative examples. preparation engagements, and when assisting in the preparation of reports for these engagements. This includes other reporting considerations, such as • Application is tested in all four areas of the AUD section. Application comparative financial statements, consistency, supplementary information tasks focus on general topics such as professional responsibilities and and special considerations when performing engagements under Government documentation, and the day-to-day tasks that newly licensed CPAs perform, Auditing Standards. frequently using standardized application tools such as audit programs and sampling techniques. Skill allocation The Exam focuses on testing of higher order skills. Based on the nature of the • Analysis and Evaluation skills, tested in Area II and Area III, involve tasks that task, each representative task in the AUD section blueprint is assigned a skill require a higher level of analysis and interpretation. These tasks, such as level. AUD section considerations related to the skill levels are discussed below. concluding on sufficiency and appropriateness of evidence, frequently require newly licensed CPAs to apply professional skepticism and judgment. Skill levels The representative tasks combine both the applicable content knowledge and the skills required in the context of the work that a newly licensed CPA would The examination or assessment of problems, and Evaluation reasonably be expected to perform. use of judgment to draw conclusions. The examination and study of the interrelationships of separate areas in order to identify causes and find Analysis evidence to support inferences. The use or demonstration of knowledge, concepts Application or techniques. The perception and comprehension of the Remembering and significance of an area utilizing knowledge gained. Understanding Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD4

9 Section introduction Auditing and Attestation (continued) References — Audit • AICPA Audit and Accounting Guides • AICPA Statements on Auditing Standards and Interpretations • AICPA Code of Professional Conduct Public Company Accounting Oversight Board (PCAOB) Standards (SEC-Approved) • and Related Rules, PCAOB Staff Questions and Answers and PCAOB Staff Audit • Sarbanes-Oxley Act of 2002 Practice Alerts U.S. Department of Labor (DOL) Guidelines and Interpretive Bulletins re: Auditor • • U.S. Government Accountability Office Government Auditing Standards Independence • Single Audit Act, as amended • SEC Independence Rules • Office of Management and Budget (OMB) Audit requirements for Federal • Employee Retirement Income Security Act of 1974 Awards (2 CFR 200) • The Committee of Sponsoring Organizations of the Treadway Commission • AICPA Statements on Quality Control Standards (COSO): Internal Control — Integrated Framework • AICPA Statements on Standards for Accounting and Review Services and • Current textbooks on auditing, attestation services, ethics and independence Interpretations AICPA Statements on Standards for Attestation Engagements and Interpretations • Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD5

10 Auditing and Attestation (AUD) Summary blueprint Content area allocation Weight I. Ethics, Professional Responsibilities and General Principles 15 –25 % II. Assessing Risk and Developing a Planned Response 20–30% III. Performing Further Procedures and Obtaining Evidence 30–40% 15 –25 % IV. Forming Conclusions and Reporting Weight Skill allocation Evaluation 5 –15 % 15 –25 % Analysis Application 30–40% Remembering and Understanding 30–40% Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD6

11 Auditing and Attestation (AUD) Area I — Ethics, Professional Responsibilities and General Principles (15–25%) Skill Remembering and Representative task Evaluation Application Analysis Content group/topic Understanding A. Nature and scope 1. Nature and scope: audit Identify the nature, scope and objectives of the different types of audit engagements, engagements including issuer and nonissuer audits. 2. Nature and scope: engagements conducted under Government Identify the nature, scope and objectives of engagements performed in accordance Accountability Office with Government Accountability Office Government Auditing Standards. Government Auditing Standards 3. Nature and scope: non-audit Identify the nature, scope and objectives of the different types of non-audit engagements engagements, including engagements conducted in accordance with the attestation standards and the accounting and review services standards. B. Ethics, independence and professional conduct 1. AICPA Code of Understand the principles, rules and interpretations included in the AICPA Code of Professional Professional Conduct. Conduct Recognize situations that present threats to compliance with the AICPA Code of Professional Conduct, including threats to independence. Apply the principles, rules and interpretations included in the AICPA Code of Professional Conduct to given situations. Apply the Conceptual Framework for Members in Public Practice included in the AICPA Code of Professional Conduct to situations that could present threats to compliance with the rules included in the Code. Apply the Conceptual Framework for Members in Business included in the AICPA Code of Professional Conduct to situations that could present threats to compliance with the rules included in the Code. Apply the Conceptual Framework for Independence included in the AICPA Code of Professional Conduct to situations that could present threats to compliance with the rules included in the Code. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD7

12 Auditing and Attestation (AUD) Area I — Ethics, Professional Responsibilities (continued) and General Principles (15–25%) Skill Remembering and Analysis Evaluation Representative task Application Content group/topic Understanding B. Ethics, independence and professional conduct (continued) 2. Requirements of the Understand the ethical requirements of the Securities and Exchange Commission Securities and and the Public Company Accounting Oversight Board. the Exchange Commission and the Public Company Recognize situations that present threats to compliance with the ethical requirements Accounting Oversight Board of the Securities and Exchange Commission and the Public Company Accounting Oversight Board. Apply the ethical requirements and independence rules of the Securities and Exchange Commission and the Public Company Accounting Oversight Board to situations that could present threats to compliance during an audit of an issuer. 3. Requirements of the Recognize situations that present threats to compliance with the ethical Government requirements of the Government Accountability Office Government Auditing Accountability Office Standards. and the Department of Labor Recognize situations that present threats to compliance with the ethical requirements of the Department of Labor. Apply the ethical requirements and independence rules of the Government Accountability Office Government Auditing Standards to situations that could present threats to compliance during an audit of, or attestation engagement for, a government entity or an entity receiving federal awards. Apply the independence rules of the Department of Labor to situations that could present threats to compliance during an audit of employee benefit plans. 4. Professional skepticism Understand the concepts of professional skepticism and professional judgment. and professional judgment Understand personal bias and other impediments to acting with professional skepticism, such as threats, incentives and judgment-making shortcuts. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD8

13 Auditing and Attestation (AUD) Area I — Ethics, Professional Responsibilities (continued) and General Principles (15–25%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding C. Terms of engagement 1. Preconditions for an Identify the preconditions needed for accepting or continuing an audit or engagement non-audit engagement. Perform procedures to determine whether the preconditions needed for accepting or continuing an audit or non-audit engagement are present. Perform procedures to determine whether the financial reporting framework to be applied to an entity’s financial statements is acceptable. Perform procedures to obtain the agreement of management that it acknowledges and understands its responsibilities for an audit or non-audit engagement. 2. Terms of engagement Identify the factors affecting the acceptance or continuance of an audit or non-audit and engagement letter engagement. Identify the factors to consider when management requests a change in the type of engagement (e.g., from an audit to a review). Perform procedures to confirm that a common understanding of the terms of an engagement exist with management and those charged with governance. Document the terms of an audit or non-audit engagement in a written engagement letter or other suitable form of written agreement. D. Requirements for engagement documentation Identify the elements that comprise sufficient appropriate documentation for an audit or non-audit engagement. Identify the requirements for the assembly and retention of documentation for an audit or non-audit engagement. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD9

14 Auditing and Attestation (AUD) Area I — Ethics, Professional Responsibilities (continued) and General Principles (15–25%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding D. Requirements for engagement documentation (continued) Prepare documentation that is sufficient to enable an experienced auditor having no previous connection with an audit engagement to understand the nature, timing, extent and results of procedures performed and the significant findings and conclusions reached. Prepare documentation that is sufficient to enable an accountant having no previous connection with a non-audit engagement to understand the nature, timing, extent and results of procedures performed and the significant findings and conclusions reached. E. Communication with management and those charged with governance 1. Planned scope Identify the matters related to the planned scope and timing of an audit or and timing of an non-audit engagement that should be communicated to management and those engagement charged with governance. Prepare presentation materials and supporting schedules for use in communicating the planned scope and timing of an audit or non-audit engagement to management and those charged with governance. 2. Internal control Identify the matters related to deficiencies and material weaknesses in internal related matters control that should be communicated to those charged with governance and management for an audit or non-audit engagement and the timing of such communications. Prepare written communication materials for use in communicating identified internal control deficiencies and material weaknesses for an audit or non-audit engagement to those charged with governance and management. 3. All other matters Identify matters, other than those related to the planned scope and timing or deficiencies, and material weaknesses in internal control that should be communicated to management and those charged with governance for an audit or non-audit engagement. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD10

15 Auditing and Attestation (AUD) Area I — Ethics, Professional Responsibilities (continued) and General Principles (15–25%) Skill Remembering and Evaluation Analysis Application Representative task Content group/topic Understanding F. Communication with component auditors and parties other than management and those charged with governance Identify matters that should be communicated to component auditors in a group audit engagement. Identify matters that should be communicated to parties other than management and those charged with governance (e.g., communications required by law or regulation) for an audit or non-audit engagement. G. A firm’s system of quality control, including quality control at the engagement level Recognize a CPA firm’s responsibilities for its accounting and auditing practice’s system of quality control. Apply quality control procedures on an audit or non-audit engagement. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD11

16 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing a Planned Response (20–30%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding A. Planning an engagement 1. Developing an Explain the purpose and significance of the overall engagement strategy for an audit overall engagement or non-audit engagement. strategy Prepare a detailed engagement plan for an audit or non-audit engagement starting 2. Developing a detailed with the prior-year engagement plan or with a template. engagement plan Prepare supporting planning related materials (e.g., client assistance request listings, time budgets) for a detailed engagement plan starting with the prior-year engagement plan or with a template. Develop or modify a detailed engagement plan for an audit or non-audit engagement based on planning inputs and constraints. B. Understanding an entity and its environment Identify and document the relevant industry, regulatory and other external factors 1. External factors, that impact an entity and/or the inherent risk of material misstatement, including the including the applicable financial reporting framework. applicable financial reporting Document the procedures that were performed to obtain an understanding of the framework relevant industry, regulatory and other external factors that impact an entity and/ or the inherent risk of material misstatement, including the applicable financial reporting framework. Identify and document the relevant factors that define the nature of an entity, including 2. Internal factors, the impact on the risk of material misstatement (e.g., its operations, ownership and including nature of governance structure, investment and financing plans, selection of accounting policies the entity, and objectives and strategies). ownership and governance Document the procedures that were performed to obtain an understanding of the structures and risk relevant factors that define the nature of an entity, including the impact on the risk strategy of material misstatement (e.g., its operations, ownership and governance structure, investment and financing plans, selection of accounting policies, and objectives and strategies). Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD12

17 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing (continued) a Planned Response (20–30%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding C. Understanding an entity’s internal control 1. Control Identify and document the significant components of an entity’s control environment, environment and including its entity-level controls. entity-level controls 2. Flow of transactions Perform and document the procedures to obtain an understanding of the significant and design of components of an entity’s control environment, including its entity-level controls. internal controls Perform a walkthrough and document the flow of transactions relevant to an audit of an entity’s financial statements, including an audit of an entity’s internal controls. Perform tests of the design and implementation of internal controls relevant to an audit of an entity’s financial statements, including an audit of an entity’s internal controls. Identify and document the key controls within the flow of an entity’s transactions relevant to an audit of an entity’s financial statements, including an audit of an entity’s internal controls. Evaluate whether internal controls relevant to an audit of an entity’s financial statements, including an audit of an entity’s internal controls, are effectively designed and placed in operation. 3. Implications of an Identify and document the purpose and significance of an entity’s use of a service entity using a organization, including its impact on an audit of an entity’s financial statements, service organization including an audit of an entity’s internal controls. Use a service organization report to determine the nature and extent of testing procedures to be performed in an audit of an entity’s financial statements, including an audit of an entity’s internal controls. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD13

18 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing (continued) a Planned Response (20–30%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding C. Understanding an entity’s internal control (continued) 4. Information Identify and document an entity’s key IT general and application controls, including Technology (IT) their impact on the audit of an entity’s financial statements, including an audit of an general and entity’s internal controls. application controls Perform and document the tests of an entity’s IT general and application controls, including controls relevant to the audit of an entity’s financial statements, including an audit of an entity’s internal controls. 5. Limitations of Understand the limitations of internal controls and the potential impact on the risk of controls and risk of material misstatement of an entity’s financial statements. management override Identify and document the risks associated with management override of internal controls and the potential impact on the risk of material misstatement of an entity’s financial statements. D. Assessing risks due to fraud, including discussions among the engagement team about the risk of material misstatement due to fraud or error Assess risks of material misstatement of an entity’s financial statements due to fraud or error (e.g., during a brainstorming session), leveraging the combined knowledge and understanding of the engagement team. E. Identifying and assessing the risk of material misstatement, whether due to error or fraud, and planning further procedures responsive to identified risks 1. Impact of risks at Identify and document the assessed impact of risks of material misstatement at the the financial financial statement level, taking into account the effect of relevant controls. statement level Analyze identified risks to detect those that relate to an entity’s financial statements as a whole (as contrasted to the relevant assertion level). Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD14

19 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing (continued) a Planned Response (20–30%) Skill Remembering and Application Analysis Representative task Evaluation Content group/topic Understanding E. Identifying and assessing the risk of material misstatement, whether due to error or fraud, and planning further procedures responsive to identified risks (continued) 2. Impact of risks Identify and document risks and related controls at the relevant assertion level for for each relevant significant classes of transactions, account balances and disclosures in an entity’s assertion at the financial statements. class of transaction, account balance Analyze the potential impact of identified risks at the relevant assertion level for and disclosure significant classes of transactions, account balances and disclosures in an entity’s levels financial statements, taking account of the controls the auditor intends to test. 3. Further procedures Develop planned audit procedures that are responsive to identified risks of material responsive to misstatement due to fraud or error at the relevant assertion level for significant identified risks classes of transactions and account balances. Analyze the risk of material misstatement, including the potential impact of individual and cumulative misstatements, to provide a basis for developing planned audit procedures. F. Materiality 1. For the financial Understand materiality as it relates to the financial statements as a whole. statements as a whole Calculate materiality for an entity’s financial statements as a whole. Calculate the materiality level (or levels) to be applied to classes of transactions, account balances and disclosures in an audit of an issuer or nonissuer. 2. Performance Understand the use of performance materiality and tolerable misstatement in an materiality and audit of an issuer or nonissuer. tolerable misstatement Calculate performance materiality or tolerable misstatement for the purposes of assessing the risk of material misstatement and determining the nature, timing and extent of further audit procedures in an audit of an issuer or nonissuer. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD15

20 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing (continued) a Planned Response (20–30%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding G. Planning for and using the work of others, including group audits, the internal audit function and the work of a specialist Identify the factors to consider in determining the extent to which an engagement team can use the work of the internal audit function in an audit or non-audit engagement. Identify the factors to consider in determining the extent to which an engagement team should use the work of a specialist in an audit or non-audit engagement. Identify the factors to consider in determining the extent to which an auditor can use the work of a component auditor in a group audit. Determine the nature and scope of the work of the internal audit function that can be used in an audit or non-audit engagement. Perform procedures to utilize the work of a specialist to obtain evidence in an audit or non-audit engagement. Determine the nature and scope of the work of a component auditor, including the identification of significant components that can be used in a group audit. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD16

21 Auditing and Attestation (AUD) Area II — Assessing Risk and Developing (continued) a Planned Response (20–30%) Skill Remembering and Analysis Evaluation Representative task Application Content group/topic Understanding H. Specific areas of engagement risk 1. An entity’s Understand the accountant’s responsibilities with respect to laws and regulations compliance with that have a direct effect on the determination of material amounts or disclosures in laws and an entity’s financial statements for an audit or non-audit engagement. regulations, including possible Understand the accountant’s responsibilities with respect to laws and regulations that illegal acts are fundamental to an entity’s business but do not have a direct effect on the entity’s financial statements in an audit or non-audit engagement. Perform tests of compliance with laws and regulations that have a direct effect on material amounts or disclosures in an entity’s financial statements in an audit or non-audit engagement. Perform tests of compliance with laws and regulations that are fundamental to an entity’s business, but do not have a direct effect on the entity’s financial statements for an audit or non-audit engagement. 2. Accounting Recognize the potential impact of significant accounting estimates on the risk estimates, including of material misstatement, including the indicators of management bias. fair value estimates 3. Related parties Perform procedures to identify related party relationships and transactions for and related party an audit or non-audit engagement, including consideration of significant unusual transactions transactions and transactions with executive officers. Analyze the potential impact of related party relationships and transactions on the risk of material misstatement for an audit or non-audit engagement, including consideration of significant unusual transactions and transactions with executive officers. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD17

22 Auditing and Attestation (AUD) Area III — Performing Further Procedures and Obtaining Evidence (30–40%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Understanding sufficient appropriate evidence Investigate evidence that either contradicts or corroborates management explanations, expectations and other hypotheses throughout an audit or non-audit engagement. Conclude on the sufficiency and appropriateness of evidence obtained during the audit engagement for an issuer or nonissuer. Conclude on the sufficiency and appropriateness of evidence obtained during a non-audit engagement based on the objectives and reporting requirements of the engagement. B. Sampling techniques Understand the purpose and application of sampling techniques in an audit or non-audit engagement. Use sampling techniques to extrapolate the characteristics of a population from a sample of items C. Performing specific procedures to obtain evidence 1. Analytical Determine the suitability of substantive analytical procedures to provide evidence to support an procedures identified assertion. Develop an expectation of recorded amounts or ratios when performing analytical procedures in an audit or non-audit engagement and determine whether the expectation is sufficiently precise to identify a misstatement in the entity’s financial statements or disclosures. Perform analytical procedures during engagement planning for an audit or non-audit engagement. Perform analytical procedures near the end of an audit engagement that assist the auditor when forming an overall conclusion about whether the financial statements are consistent with the auditor’s understanding of the entity. Evaluate the reliability of data from which an expectation of recorded amounts or ratios is developed when performing analytical procedures in an audit or non-audit engagement. Evaluate the significance of the differences of recorded amounts from expected values when performing analytical procedures in an audit or non-audit engagement. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD18

23 Auditing and Attestation (AUD) Area III — Performing Further Procedures and (continued) Obtaining Evidence (30–40%) Skill Remembering and Application Evaluation Representative task Analysis Content group/topic Understanding C. Performing specific procedures to obtain evidence (continued) 2. External Prepare external confirmation requests to obtain relevant and reliable evidence in an audit confirmations engagement of an issuer or nonissuer, including considerations when using electronic confirmations. Use external confirmations to obtain relevant and reliable evidence in an audit engagement of an issuer or nonissuer, including considerations when using electronic confirmations. Analyze external confirmation responses in the audit of an issuer or nonissuer to determine the need for follow-up or further investigation. 3. Inquiry of Inquire of management and others to gather evidence and document the results in an management audit or non-audit engagement. and others Analyze responses obtained during structured or informal interviews with management and others, including those in non-financial roles, and ask relevant and effective follow-up questions to understand their perspectives and motivations in an audit or non-audit engagement. 4. Observation and Perform tests of operating effectiveness of internal controls, including the analysis inspection of exceptions to identify deficiencies in an audit of financial statements or an audit of internal control. Evaluate evidence through the use of observation and inspection procedures in an audit or non-audit engagement. 5. Recalculation and Use recalculation and reperformance to obtain evidence in an audit or non-audit reperformance engagement. 6. All other Identify other procedures in addition to those set out in professional standards, as procedures necessary, to achieve the audit objectives in an audit of an issuer or a nonissuer. Perform other procedures in addition to those set out in professional standards, as necessary, to achieve the audit objectives in an audit of an issuer or nonissuer. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD19

24 Auditing and Attestation (AUD) Area III — Performing Further Procedures and (continued) Obtaining Evidence (30–40%) Skill Remembering and Application Evaluation Representative task Analysis Content group/topic Understanding C. Performing specific procedures to obtain evidence (continued) Modify planned procedures based upon new information, such as inconsistent 6. All other explanations, new evidence and environmental cues, to achieve audit objectives in an procedures audit of an issuer or a nonissuer. (continued) D. Specific matters that require special consideration 1. Opening balances Test whether prior-period closing balances have been correctly brought forward to the current period or restated in the audit of an issuer or nonissuer, including investigation of differences. Identify the considerations relating to the measurement and disclosure of the fair value 2. Investments of investments in securities and derivative instruments in an audit of an issuer in securities or nonissuer. and derivative instruments Test management’s assumptions, conclusions and adjustments related to the valuation of investments in securities and derivative instruments in an audit of an issuer or nonissuer. 3. Inventory and Analyze management’s instructions and procedures for recording and controlling the inventory held results of an entity’s physical inventory counting in an audit of an issuer or nonissuer. by others Observe the performance of inventory counting procedures, inspect the inventory and perform test counts to verify the ending inventory quantities in an audit of an issuer or nonissuer. 4. Litigation, claims Perform appropriate audit procedures, such as inquiring of management and others, and assessments reviewing minutes and sending external confirmations, to detect the existence of litigation, claims and assessments in an audit of an issuer or nonissuer. Analyze management’s estimate of the liability associated with litigation, claims and assessments in an audit of an issuer or nonissuer. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD20

25 Auditing and Attestation (AUD) Area III — Performing Further Procedures and (continued) Obtaining Evidence (30–40%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding D. Specific matters that require special consideration (continued) 5. An entity’s ability Identify the factors that could cause substantial doubt about an entity’s ability to continue to continue as a as a going concern for a reasonable period of time in an audit of an issuer or nonissuer. going concern Perform procedures related to the assessment of management’s evaluation and conclusion regarding an entity’s ability to continue as a going concern in an audit of an issuer or nonissuer. 6. Accounting Perform procedures to analyze an entity’s calculations and detailed support for estimates, significant accounting estimates in an audit of an issuer or nonissuer, including including fair consideration of information that contradicts assumptions made by management. value estimates Evaluate the reasonableness of significant accounting estimates in an audit of an issuer or nonissuer. E. Misstatements and internal control deficiencies Prepare a summary of corrected and uncorrected misstatements. Determine the effect of uncorrected misstatements on an entity’s financial statements in an audit or non-audit engagement. Determine the effect of identified misstatements on the assessment of internal control over financial reporting in an audit of an issuer or nonissuer. Evaluate the significance of internal control deficiencies on the risk of material misstatement of financial statements in an audit of an issuer or nonissuer. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD21

26 Auditing and Attestation (AUD) Area III — Performing Further Procedures and (continued) Obtaining Evidence (30–40%) Skill Remembering and Analysis Evaluation Application Representative task Content group/topic Understanding F. Written representations Identify the written representations that should be obtained from management or those charged with governance in an audit or non-audit engagement. Assist in the preparation of required written representations that should be obtained from management or those charged with governance in an audit or non-audit engagement. G. Subsequent events and subsequently discovered facts Perform procedures to identify subsequent events that could affect an entity’s financial statements or the auditor’s report, including 1) events that occur between the date of the financial statements and the date of the auditor’s report and 2) facts that become known to the auditor after the date of the auditor’s report in an audit of an issuer or nonissuer. Perform procedures to identify subsequent events that could affect an entity’s financial statements or the accountant’s report, including 1) events that occur between the date of the financial statements and the date of the report and 2) facts that become known to the accountant after the date of the report in a non-audit engagement. Determine whether identified subsequent events are appropriately reflected in an entity’s financial statements and disclosures in an audit or non-audit engagement. Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD22

27 Auditing and Attestation (AUD) Area IV — Forming Conclusions and Reporting (15 –25 %) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Reports on auditing engagements 1. Forming an audit Identify the factors that an auditor should consider when forming an opinion on an entity’s opinion, including financial statements. modification of an auditor’s opinion Identify the type of opinion that an auditor should render on the audit of an issuer or nonissuer’s financial statements, including unmodified (or unqualified), qualified, adverse or disclaimer of opinion. Identify the factors that an auditor should consider when it is necessary to modify the audit opinion on an issuer or nonissuer’s financial statements, including when the financial statements are materially misstated and when the auditor is unable to obtain sufficient appropriate audit evidence. 2. Form and content Identify the appropriate form and content of an auditor’s report for an audit of of an audit report, an issuer or nonissuer’s financial statements, including the appropriate use of including the use of emphasis-of-matter and other-matter (i.e., explanatory) paragraphs. emphasis-of-matter and other-matter Prepare a draft auditor’s report starting with a report example (e.g., an illustrative audit (explanatory) report from professional standards) for an audit of an issuer or nonissuer. paragraphs 3. Audit of Identify the factors that an auditor should consider when forming an opinion on the internal control effectiveness of internal control in an audit of internal control. integrated with an audit of financial Identify the appropriate form and content of a report on the audit of internal control, statements including report modifications and the use of separate or combined reports for the audit of an entity’s financial statements and the audit of internal control. Prepare a draft report for an audit of internal control integrated with the audit of an entity’s financial statements, starting with a report example (e.g., an illustrative report from professional standards). Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD23

28 Auditing and Attestation (AUD) Area IV — Forming Conclusions and Reporting (continued) (15 –25 %) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding B. Reports on attestation engagements 1. General standards Identify the factors that a practitioner should consider when issuing an examination or for attestation review report for an attestation engagement. reports Prepare a draft examination or review report for an attestation engagement starting with a report example (e.g., an illustrative report from professional standards). 2. Agreed-upon Identify the factors that a practitioner should consider when issuing an agreed-upon procedures procedures report for an attestation engagement. reports Prepare a draft agreed-upon procedures report for an attestation engagement starting with a report example (e.g., an illustrative report from professional standards). 3. Reporting on Identify the factors that a service auditor should consider when reporting on the controls at a examination of controls at a service organization. service organization Prepare a draft report for an engagement to report on the examination of controls at a service organization, starting with a report example (e.g., an illustrative report from professional standards). Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD24

29 Auditing and Attestation (AUD) Area IV — Forming Conclusions and Reporting (continued) (15 –25 %) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding C. Accounting and review service engagements 1. Preparation Identify the factors that an accountant should consider when performing a preparation engagements engagement. 2. Compilation Identify the factors that an accountant should consider when reporting on an reports engagement to compile an entity’s financial statements, including the proper form and content of the compilation report. Prepare a draft report for an engagement to compile an entity’s financial statements, starting with a report example (e.g., an illustrative report from professional standards). 3. Review reports Identify the factors that an accountant should consider when reporting on an engagement to review an entity’s financial statements, including the proper form and content of the review report. Prepare a draft report for an engagement to review an entity’s financial statements, starting with a report example (e.g., an illustrative report from professional standards). Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD25

30 Auditing and Attestation (AUD) Area IV — Forming Conclusions and Reporting (continued) (15 –25 %) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding D. Reporting on compliance Identify the factors that an auditor should consider when reporting on compliance with aspects of contractual agreements or regulatory requirements in connection with an audit of an entity’s financial statements. Identify the factors that a practitioner should consider when reporting on an attestation engagement related to an entity’s compliance with the requirements of specified laws, regulations, rules, contracts or grants, including reports on the effectiveness of internal controls over compliance with the requirements. Prepare a draft compliance report for an attestation engagement to report on an entity’s compliance with the requirements of specified laws, regulations, rules, contracts or grants starting with a report example (e.g., an illustrative report from professional standards). Prepare a draft compliance report when reporting on compliance with aspects of contractual agreements or regulatory requirements in connection with an audit of an entity’s financial statements starting with a report example (e.g., an illustrative report from professional standards). E. Other reporting considerations 1. Comparative Identify the factors that would affect the comparability or consistency of financial statements and statements, including a change in accounting principle, the correction of a material consistency misstatement and a material change in classification. between periods 2. Other information Understand the auditor’s responsibilities related to other information included in in documents with documents with audited financial statements. audited statements 3. Review of interim Identify the factors an auditor should consider when reporting on an engagement to financial review interim financial information. information Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD26

31 Auditing and Attestation (AUD) Area IV — Forming Conclusions and Reporting (continued) (15 –25 %) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding E. Other reporting considerations (continued) 4. Supplementary Identify the factors an auditor should consider when reporting on supplementary information information included in or accompanying an entity’s financial statements. Identify the factors an auditor should consider when reporting on the audit of a single 5. Single statements financial statement. Identify the factors an auditor should consider when reporting on the audit of financial 6. Special-purpose statements prepared in accordance with a financial reporting framework generally and other country accepted in another country, when the financial statements are intended for use outside frameworks of the United States. Identify the factors an auditor should consider when reporting on the audit of financial statements prepared in accordance with a special-purpose framework, including cash basis, tax basis, regulatory basis, contractual basis or other basis. 7. Letters for Identify the factors an auditor should consider when engaged to issue a comfort letter underwriters and in connection with an entity’s financial statements that are included in a securities filings with the SEC offering. Identify the factors an auditor should consider in connection with audited financial statements of a nonissuer that are included in a registration statement. 8. Alerts that restrict Identify the factors an auditor should consider when restricting the use of written the use of written communication by including an alert when the potential exists for the written communication communication to be misunderstood or taken out of context. 9. Additional reporting Identify requirements under Government Accountability Office Government Auditing requirements Standards related to reporting on internal control over financial reporting and compliance under Government with provisions of law, regulations, contracts and grant agreements that have a material Accountability effect on the financial statements. Office Government Auditing Standards Uniform CPA Examination Blueprints: Auditing and Attestation (AUD) AUD27

32 Uniform CPA Examination Business Environment and Concepts (BEC) Blueprint Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC1

33 Section introduction Business Environment and Concepts Content allocation The Business Environment and Concepts (BEC) section of the Uniform CPA The following table summarizes the content areas and the allocation of content Examination (the Exam) tests knowledge and skills that a newly licensed CPA tested in the BEC section of the Exam: must demonstrate when performing: • Audit, attest, accounting and review services Allocation Content area • Financial reporting • Tax preparation 17–27% Area I Corporate Governance • Other professional responsibilities in their role as certified public accountants 17–27% Area II Economic Concepts and Analysis The content areas tested under the BEC section of the Exam encompass five diverse subject areas. These content areas are corporate governance, economic 11–21% Area III Financial Management concepts and analysis, financial management, information technology and operations management. Reference materials relevant to the BEC section of the 15 -25% Area IV Information Technology Exam are included under References at the conclusion of this introduction. 15 -25% Area V Operations Management Content organization and tasks The BEC section blueprint is organized by content AREA, content GROUP and content TOPIC. Each group or topic includes one or more representative TASKS Overview of content areas that a newly licensed CPA may be expected to complete when performing audit, Area I of the BEC section blueprint covers several topics related to Corporate attest, accounting and review services, financial reporting, tax preparation or Governance, including the following: other professional responsibilities. • Knowledge of the purpose and objectives of internal control frameworks and enterprise risk management frameworks The tasks in the blueprint are representative. They are not intended to be (nor should they be viewed as) an all-inclusive list of tasks that may be tested in the • Identifying the components and principles of internal control frameworks and BEC section of the Exam. Additionally, it should be noted that the number of enterprise risk management frameworks. tasks associated with a particular content group or topic is not indicative of • Identifying key corporate governance provisions of the Sarbanes-Oxley Act the extent such content group, topic or related skill level will be assessed of 2002 on the Exam. Similarly, examples provided within the task statements should not be viewed as all-inclusive. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC2

34 Section introduction Business Environment and Concepts (continued) Area II of the BEC section blueprint covers several topics related to Economic Area IV of the BEC section blueprint covers several topics related to Concepts and Analysis, including the following: Information Technology, including the following: • Understanding the governance of the information technology operations of • Knowledge of economic concepts and analysis that would demonstrate an understanding of the impact of business cycles on an entity’s industry or a business business operation • Identifying information systems that are used to process and accumulate Determining market influences on the business environment, such as • data as well as provide monitoring and financial reporting information globalization • Determining whether there is appropriate segregation of duties, authorization • Determining the business reasons for, and the underlying economic substance levels and data security in an organization to maintain an appropriate internal of, transactions and their accounting implications control structure Understanding financial risks and the methods for mitigating the impact of • • Identifying business and operational risks inherent in an entity’s disaster recovery/business continuity plan these risks Area V of the BEC section blueprint covers several topics related to Operations Area III of the BEC section blueprint covers several topics related to Financial Management, including the following: Management, including the following: • Assessing the factors influencing a company’s capital structure, such • Understanding business operations and use of quality control initiatives and performance measures to improve operations as risk, leverage, cost of capital, growth rate, profitability, asset structure and loan covenants • Application of cost accounting concepts and use of variance analysis • Calculating metrics associated with the components of working capital, such techniques as current ratio, quick ratio, cash conversion cycle, turnover ratios • Utilizing budgeting and forecasting techniques to monitor progress and • Determining the impact of business decisions on working capital enhance accountability Understanding commonly used financial valuation and decision models and • applying that knowledge to assess assumptions, calculate the value of assets and compare investment alternatives Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC3

35 Section introduction Business Environment and Concepts (continued) Skill allocation Application is also tested in all five areas of the BEC section. Application • The Exam focuses on testing higher order skills. Based on the nature of the task, tasks focus on general topics such as those found in the subjects of each representative task in the BEC section blueprint is assigned a skill level. economics and information technology, and the day-to-day financial BEC section considerations related to the skill levels are discussed below. management tasks that newly licensed CPAs perform, such as those involving calculations involving ratios, valuation and budgeting. • Analysis skills, tested in Areas II, III and V involve tasks that require a Skill levels higher level of analysis and interpretation. These tasks, such as comparing The examination or assessment of problems, and investment alternatives using calculations of financial metrics, financial Evaluation use of judgment to draw conclusions. modeling, forecasting and projection, frequently require newly licensed CPAs to gather evidence to support inferences. The examination and study of the interrelationships of separate areas in order to identify causes and find The representative tasks combine both the applicable content knowledge Analysis evidence to support inferences. and the skills required in the context of the work that a newly licensed CPA would reasonably be expected to perform. The BEC section does not test any The use or demonstration of knowledge, concepts content at the Evaluation skill level as newly licensed CPAs are not expected to Application or techniques. demonstrate that level of skill in regards to the BEC content. The perception and comprehension of the Remembering and significance of an area utilizing knowledge gained. Understanding Remembering and Understanding is tested in all five areas of the BEC section. • Remembering and understanding tasks focus on the knowledge necessary to demonstrate an understanding of the general business environment and business concepts, such as those involving enterprise risk management. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC4

36 Section introduction Business Environment and Concepts (continued) References — Business Environment and Concepts • The Committee of Sponsoring Organizations of the Treadway Commission (COSO): – Internal Control – Integrated Framework – Enterprise Risk Management – Integrating with Strategy and Performance • Sarbanes-Oxley Act of 2002: – Title III, Corporate Responsibility Title IV, Enhanced Financial Disclosures – – Title VIII, Corporate and Criminal Fraud Accountability Title IX, White-Collar Crime Penalty Enhancements – – Title XI, Corporate Fraud Accountability • Current business periodicals • Current textbooks on: – Accounting Information Systems – Budgeting and Measurement – Corporate Governance – Economics – Enterprise Risk Management – Finance – Management – Management Information Systems – Managerial Accounting – Production Operations Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC5

37 Business Environment and Concepts Summary blueprint Content area allocation Weight I. Corporate Governance 17–27% II. Economic Concepts and Analysis 17–27% III. Financial Management 11–21% IV. Information Technology 15–25 % V. Operations Management 15–25 % Weight Skill allocation Evaluation — 20–30% Analysis Application 50–60% Remembering and Understanding 15–25 % Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC6

38 Business Environment and Concepts Area I — Corporate Governance (17–27%) Skill Remembering and Analysis Representative task Application Evaluation Content group/topic Understanding A. Internal control frameworks 1. Purpose and Define internal control within the context of the COSO internal control framework, objectives including the purpose, objectives and limitations of the framework. 2. Components Identify and define the components, principles and underlying structure of the COSO internal and principles control framework. Apply the COSO internal control framework to identify entity and transaction level risks (inherent and residual) related to an organization’s compliance, operations and reporting (internal and external, financial and non-financial) objectives. Apply the COSO internal control framework to identify risks related to fraudulent financial and non-financial reporting, misappropriation of assets and illegal acts, including the risk of management override of controls. Apply the COSO internal control framework to identify controls to meet an entity’s compliance, operations and reporting (internal and external, financial and non-financial) objectives, throughout an entity’s structure, from entity-wide through sub-units, down to the transactional level. Apply the COSO internal control framework to identify an appropriate mix of automated and manual application controls, (e.g., authorization and approval, verifications, physical controls, controls over standing data, reconciliations and supervisory controls) to prevent and detect errors in transactions. Describe the corporate governance structure within an organization (tone at the top, policies, steering committees, oversight, ethics, etc.). Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC7

39 Business Environment and Concepts Area I — Corporate Governance (continued) (17–27%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding B. Enterprise risk management (ERM) frameworks 1. Purpose and Define ERM within the context of the COSO ERM framework, including the purpose and objectives objectives of the framework. 2. Components Identify and define the components, principles and underlying structure of the COSO ERM and principles framework. Understand the relationship among risk, business strategy and performance within the context of the COSO ERM framework. Apply the COSO ERM framework to identify risk/opportunity scenarios in an entity. C. Other regulatory frameworks and provisions Identify and define key corporate governance provisions of the Sarbanes-Oxley Act of 2002 and other regulatory pronouncements. Identify regulatory deficiencies within an entity by using the requirements associated with the Sarbanes-Oxley Act of 2002. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC8

40 Business Environment and Concepts Area II — Economic Concepts and Analysis (17–27%) Skill Remembering and Analysis Evaluation Representative task Application Content group/topic Understanding A. Economic and business cycles - measures and indicators Identify and define business cycles (trough, expansion, peak, recession) and conditions and government policies that impact an entity’s industry or operations. Use appropriate inputs to calculate economic measures and indicators (e.g., Nominal and Real GDP, Consumer Price Index, Aggregate Demand Curve, Money Supply, etc.) and apply leading, coincident and lagging indicators (e.g., bond yields, new housing starts, personal income, unemployment, etc.). Use economic measures and indicators to explain the impact on an entity’s industry and operations due to changes in government fiscal policy, monetary policy, regulations, trade controls and other actions. Use economic measures and indicators to explain the impact on an entity’s industry and operations due to changes in business cycles and economic conditions, caused by factors such as exchange rates, inflation, productivity, state of the global economy, unemployment levels, etc. B. Market influences on business Identify and define the key factors related to the economic marketplace (e.g., competition, currencies, globalization, supply and demand, trade, etc.) and how they generally apply to a business entity. Identify and define market influences (e.g., economic, environmental, governmental, political, legal, social and technological, etc.). Determine the impact of market influences on the overall economy (e.g., consumer demand, labor supply, market prices, production costs, volatility, etc.). Determine the impact of market influences on an entity’s business strategy, operations and risk (e.g., increasing investment and financial leverage, innovating to develop new product offerings, seeking new foreign and domestic markets, undertaking productivity or cost-cutting initiatives, etc.). Determine the business reasons for, and explain the underlying economic substance of, significant transactions (e.g., business combinations and divestitures, product line diversification, production sourcing, public and private offerings of securities, etc.). Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC9

41 Business Environment and Concepts Area II — Economic Concepts and Analysis (continued) (17–27%) Skill Remembering and Evaluation Representative task Analysis Application Content group/topic Understanding C. Financial risk management 1. Market, interest rate, currency, Calculate and use ratios and measures to quantify risks associated with interest rates, liquidity, credit, currency exchange, liquidity, prices, etc. in a business entity. price and other risks 2. Means for Identify strategies to mitigate financial risks (market, interest rate, currency, liquidity, etc.) mitigating/controlling and quantify their impact on a business entity. financial risks Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC10

42 Business Environment and Concepts Area III — Financial Management (11–21%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Capital structure Describe an organization's capital structure and related concepts, such as cost of capital, asset structure, loan covenants, growth rate, profitability, leverage and risk. Calculate the cost of capital for a given financial scenario. Compare and contrast the strategies for financing new business initiatives and operations within the context of an optimal capital structure, using statistical analysis where appropriate. B. Working capital 1. Fundamentals Calculate the metrics associated with the working capital components, such as current ratio, and key metrics quick ratio, cash conversion cycle, inventory turnover and receivables turnover. of working capital Detect significant fluctuations or variances in the working capital cycle using working capital management ratio analyses. 2. Strategies for Compare inventory management processes, including pricing and valuation methods, to managing determine the effects on the working capital of a given entity. working capital Compare accounts payable management techniques, including usage of discounts, factors affecting discount policy, uses of electronic funds transfer as a payment method and determination of an optimal vendor payment schedule in order to determine the effects on the working capital of a given entity. Distinguish between corporate banking arrangements, including establishment of lines of credit, borrowing capacity and monitoring of compliance with debt covenants in order to determine the effects on the working capital of a given entity. Interpret the differences between the business risks and the opportunities in an entity's credit management policies to determine the effects on the working capital of a given entity. Analyze the effects on working capital caused by financing using long-term debt and/or short-term debt. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC11

43 Business Environment and Concepts Area III — Financial Management (continued) (11–21%) Skill Remembering and Analysis Representative task Application Evaluation Content group/topic Understanding C. Financial valuation methods and decision models Identify and define the different financial valuation methods and their assumptions, including but not limited to fair value, Black-Scholes, Capital Asset Pricing Model and Dividend Discount Model. Identify and define the different financial decision models and assumptions involved in making decisions relating to asset and investment management, debt, equity and leasing. Identify the sources of data and factors that management considers in forming the assumptions used to prepare an accounting estimate. Describe the process and framework within which management exercises its responsibilities over the review and approval of accounting estimates. Calculate the value of an asset using commonly accepted financial valuation methods. Compare investment alternatives using calculations of financial metrics (payback period, net-present value, economic value added, cash flow analysis, internal rate of return etc.), financial modeling, forecasting, projection and analysis techniques. Compare options in a lease vs. buy decision scenario. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC12

44 Business Environment and Concepts Area IV — Information Technology (15 –25 %) Skill Remembering and Evaluation Application Analysis Representative task Content group/topic Understanding A. Information technology (IT) governance 1. Vision and strategy Identify the role that the IT function plays in determining/supporting an organization's vision and strategy. Describe the IT governance structure within an organization (tone at the top, policies, steering 2. Organization committees, IT strategies, oversight, etc.). Conduct an IT risk assessment, identify risks and suggest mitigation strategies. 3. Risk assessments B. Role of information technology in business Recognize the role of big data/data analytics and statistics in supporting business decisions. Identify the role of information systems in key business processes within an entity. Identify the role of e-commerce in key business processes within an entity. C. Information security/availability 1. Protection of Recognize the risks and controls associated with protecting sensitive and critical information information within an organization’s IT environment (the use of mobile technology, data storage devices, data transmission, cybersecurity, etc.). 2. Logical and physical Identify weaknesses and mitigation strategies within an entity’s IT environment in access controls relation to logical and physical access controls. Identify weaknesses and mitigation strategies within an entity’s IT environment in relation to IT general and application controls. 3. System disruption/ Describe an entity’s disaster recovery/business continuity plans, including threat resolution identification and mitigation strategies, data backup and recovery procedures, alternate processing facilities, etc. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC13

45 Business Environment and Concepts Area IV — Information Technology (continued) (15 –25 %) Skill Remembering and Application Evaluation Representative task Analysis Content group/topic Understanding D. Processing integrity (input/processing/output controls) Describe the role of input, processing and output controls within an entity to support completeness, accuracy and continued processing integrity. Determine the appropriateness of the design and operating effectiveness of application controls (authorizations, approvals, tolerance levels, input edits, etc.). Identify issues related to the design and effectiveness of IT control activities, including manual vs. automated controls, as well as preventive, detective and corrective controls. E. Systems development and maintenance Identify different information system testing strategies. Recognize the fundamental issues and risks associated with implementing new information systems or maintaining existing information systems within an entity. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC14

46 Business Environment and Concepts Area V — Operations Management (15 –25 %) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding A. Financial and non-financial measures of performance management Calculate financial and non-financial measures appropriate to analyze specific aspects of an entity’s performance (e.g., Economic Value Added, Costs of Quality-Prevention vs. Appraisal vs. Failure, etc.). Determine which financial and non-financial measures are appropriate to analyze specific aspects of an entity’s performance and risk profile (e.g., Return on Equity, Return on Assets, Contribution Margin, etc.). B. Cost accounting 1. Cost measurement Apply cost accounting concepts, terminology, methods and measurement techniques concepts, methods within an entity. and techniques Differentiate the characteristics of fixed, variable and mixed costs within an entity. Compare and contrast the different costing methods such as absorption vs. variable and process vs. job order costing. 2. Variance analysis Determine the appropriate variance analysis method to measure the key cost drivers by analyzing business scenarios. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC15

47 Business Environment and Concepts Area V — Operations Management (continued) (15 –25 %) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding C. Process management 1. Approaches, techniques, measures, Identify commonly used operational management approaches, techniques and measures benefits to process- within the context of business process management. management driven businesses 2. Management philosophies Identify commonly used management philosophies and techniques for performance and and techniques quality improvement within the context of business process management. for performance improvement D. Planning techniques 1. Budgeting and Prepare a budget to guide business decisions. analysis Reconcile results against a budget or prior periods and perform analysis of variances as needed. 2. Forecasting and Use forecasting and projection techniques to model revenue growth, cost and expense projection characteristics, profitability, etc. Prepare and calculate metrics to be utilized in the planning process, such as cost benefit analysis, sensitivity analysis, breakeven analysis, economic order quantity, etc. Analyze results of forecasts and projections using ratio analysis and explanations of correlations to, or variations from, key financial indices. Compare and contrast alternative approaches (such as system replacement, make vs. buy and cost/benefit) proposed to address business challenges or opportunities for a given entity. Uniform CPA Examination Blueprints: Business Environment and Concepts (BEC) BEC16

48 Uniform CPA Examination Financial Accounting and Reporting (FAR) Blueprint Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR1

49 Section introduction Financial Accounting and Reporting this topic is not intended to suggest that “Leases” are more significant to newly The Financial Accounting and Reporting (FAR) section of the Uniform CPA licensed CPAs or will be tested more than the “Notes to financial statements.” Examination (the Exam) assesses the knowledge and skills that a newly licensed Similarly, examples provided within the task statements should not be viewed as CPA must demonstrate in the financial accounting and reporting frameworks all-inclusive. used by business entities (public and nonpublic), not-for-profit entities and state and local government entities. Content allocation The financial accounting and reporting frameworks that are eligible for The following table summarizes the content areas and the allocation of content assessment within the FAR section of the Exam include the standards and tested in the FAR section of the Exam: regulations issued by the: Content area Allocation • Financial Accounting Standards Board (FASB) • U.S. Securities and Exchange Commission (U.S. SEC) Conceptual Framework, Standard-Setting Area I 25–35% and Financial Reporting American Institute of Certified Public Accountants (AICPA) • • Governmental Accounting Standards Board (GASB) 30–40% Select Financial Statement Accounts Area II • International Accounting Standards Board (IASB) A listing of standards and regulations promulgated by these bodies, and other 20–30% Select Transactions Area III reference materials that are eligible for assessment in the FAR section of the Exam are included under References at the conclusion of this introduction. 5 –15 % State and Local Governments Area IV Content organization and tasks The FAR section blueprint is organized by content AREA, content GROUP and Overview of content areas content TOPIC. Each group or topic includes one or more representative TASKS Area I of the FAR section blueprint covers FASB’s Conceptual Framework, FASB’s that a newly licensed CPA may be expected to complete in practice. standard-setting process and several different financial reporting topics. The financial reporting topics include the following: Tasks in the FAR section blueprint are representative. The tasks are not intended to be (nor should they be viewed as) an all-inclusive list of tasks that • General-purpose financial statements applicable to for-profit entities, may be tested in the FAR section of the Exam. Additionally, it should be noted not-for-profit entities and employee benefit plans under the FASB Accounting that the number of tasks associated with a particular content group or topic Standards Codification is not indicative of the extent such content group, topic or related skill level • Disclosures specific to public companies including earnings per share will be assessed on the Exam. For example, the topic titled “Notes to financial and segment reporting under the FASB Accounting Standards Codification statements” in Area I includes two tasks that are intended to encompass the and the interim, annual and periodic filing requirements for U.S. registrants in required disclosures for any topic in the FASB Accounting Standards Codification, accordance with the rules of the U.S. SEC while the group titled “Leases” in Area III includes eight tasks that are limited to • Financial statements prepared under special purpose frameworks as described the accounting requirements in Leases Topic of the FASB Accounting Standards in AU-C Section 800 of the Codification of Statements on Auditing Standards Codification. The number of tasks included in the blueprint for this group and Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR2

50 Section introduction Financial Accounting and Reporting (continued) as “not-for-profit” or “non-governmental, not-for-profit.” Questions that apply to Area II of the FAR section blueprint covers the financial accounting and reporting requirements in the FASB Accounting Standards Codification that are IFRS include phrases such as “under IFRS” or “according to IFRS.” Questions applicable to select financial statement accounts. that apply to the state and local governments include phrases such as “local government,” “state,” “municipality” or “city.” • To the extent applicable, each group and topic in the area is eligible for testing within the context of both for-profit and not-for-profit entities. If significant accounting or reporting differences exist between for-profit – Skill allocation and not-for-profit entities for a given group or topic, such differences are in The Exam focuses on testing higher order skills. Based on the nature of representative not-for-profit tasks in the blueprint. the task, each representative task in the FAR section blueprint is assigned a skill level. FAR section considerations related to the skill levels are Area III of the FAR section blueprint covers the financial accounting and discussed below. reporting requirements for select transactions that are applicable to entities under the FASB Accounting Standards Codification and the IASB standards • The testing of content under the IASB standards is limited to a separate group titled, “Differences between IFRS and U.S. GAAP.” Skill levels • To the extent applicable, the remaining groups in the area are eligible for The examination or assessment of problems, and testing within the context of both for-profit and not-for-profit entities. Evaluation use of judgment to draw conclusions. – If significant accounting or reporting differences exist between for-profit and not-for-profit entities, such differences are in representative not-for-profit The examination and study of the interrelationships tasks in the blueprint. of separate areas in order to identify causes and find Analysis evidence to support inferences. Area IV of the FAR section blueprint covers GASB’s conceptual framework as well the financial accounting and reporting requirements for state and local The use or demonstration of knowledge, concepts governments under the GASB standards and interpretations. Application or techniques. The perception and comprehension of the Remembering and Section assumptions significance of an area utilizing knowledge gained. Understanding The FAR section of the Exam includes multiple-choice questions, task-based simulations and research prompts. When completing questions in the FAR section of the Exam, candidates should assume that all of the information provided in each question is material. In addition, candidates should assume that each question applies to a for-profit business entity reporting under U.S. GAAP unless otherwise stated in the fact pattern for a question. For example, questions that apply to not-for-profit entities specify the nature of these entities Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR3

51 Section introduction (continued) Financial Accounting and Reporting • Remembering and Understanding tasks are in all four areas of the FAR blueprint. These tasks, such as identifying transactions and financial reporting requirements, frequently require newly licensed CPAs to demonstrate their comprehension of accounting concepts and standards. Area IV has the highest concentration of remembering and understanding tasks. • Application tasks are in all four areas of the FAR blueprint. These tasks, such as preparing journal entries and financial statements, frequently require newly licensed CPAs to use accounting concepts and standards to measure and recognize financial statement amounts. • Analysis tasks are in Area I, Area II and Area III of the FAR blueprint. These tasks, such as reconciling account balances, interpreting agreements and detecting financial reporting discrepancies, frequently require newly licensed CPAs to demonstrate a higher level of interpretation. Area I and Area II have the highest concentration of analysis tasks. The representative tasks combine both the applicable content knowledge and the skills required in the context of the work that a newly licensed CPA would reasonably be expected to perform. The FAR section does not test any content at the Evaluation skill level as newly licensed CPAs are not expected to demonstrate that level of skill in regards to the FAR content. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR4

52 Section introduction (continued) Financial Accounting and Reporting References — Financial Accounting and Reporting Financial Accounting Standard s Board (FASB) Accounting Standards Codification • • FASB Concepts Statements • U.S. Securities and Exchange Commission References: - Securities Exchange Act of 1934 - Regulation S-X of the Code of Federal Regulations (17 CFR Part 210) - Regulation S-K of the Code of Federal Regulations (17 CFR Part 229) • Codification of Statements on Auditing Standards: AU-C Section 800, Special Considerations – Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks AICPA Accounting and Auditing Guides • • International Financial Reporting Standards (IFRS) References: - International Financial Reporting Standards - International Accounting Standards - Interpretations issued by the IFRS Interpretations Committee - Interpretations issued by the Standing Interpretations Committee • State and Local Government References: - Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards - GASB Statements, Interpretations, Technical Bulletins and Concepts Statements - National Council on Governmental Accounting (NCGA) Statements and Interpretations Current textbooks on accounting for business entities, not-for-profit entities, and state • and local government entities Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR5

53 Financial Accounting and Reporting (FAR) Summary blueprint Content area allocation Weight I. Conceptual Framework, Standard-Setting and Financial Reporting 25–35% II. Select Financial Statement Accounts 30–40% III. Select Transactions 20–30% IV. State and Local Governments 5 –15 % Weight Skill allocation Evaluation — 25–35% Analysis Application 50–60% Remembering and Understanding 10–20% Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR6

54 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting and Financial Reporting (25–35%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Conceptual framework and standard-setting for business and nonbusiness entities 1. Conceptual Recall the purpose and characteristics in the conceptual framework for business and framework nonbusiness entities. 2. Standard-setting Recall the due process steps followed by the FASB to establish financial accounting and process reporting standards. B. General-purpose financial statements: for-profit business entities 1. Balance sheet/ Prepare a classified balance sheet from a trial balance and supporting documentation. statement of financial position Adjust the balance sheet to correct identified errors. Detect, investigate and correct discrepancies while agreeing the balance sheet amounts to supporting documentation. Calculate fluctuations and ratios and interpret the results while reviewing comparative balance sheets. 2. Income statement/ Prepare a multiple-step income statement from a trial balance and supporting statement of profit documentation. or loss Prepare a single-step income statement from a trial balance and supporting documentation. Adjust the income statement to correct identified errors. Detect, investigate and correct discrepancies while agreeing the income statement amounts to supporting documentation. Calculate fluctuations and ratios and interpret the results while reviewing comparative income statements. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR7

55 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting (continued) and Financial Reporting (25–35%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding B. General-purpose financial statements: for-profit business entities (continued) 3. Statement of Prepare a statement of comprehensive income from a trial balance and supporting comprehensive documentation. income Calculate reclassification adjustments for items of other comprehensive income. Adjust the statement of comprehensive income to correct identified errors. Detect, investigate and correct discrepancies while agreeing the statement of comprehensive income amounts to supporting documentation. 4. Statement of Prepare a statement of changes in equity from a trial balance and supporting changes in equity documentation. Adjust the statement of changes in equity to correct identified errors. Detect, investigate and correct discrepancies while agreeing the statement of changes in equity amounts to supporting documentation. 5. Statement of Prepare a statement of cash flows using the direct method and required disclosures from cash flows supporting documentation. Prepare a statement of cash flows using the indirect method and required disclosures from supporting documentation. Adjust a statement of cash flows to correct identified errors. Detect, investigate and correct discrepancies while agreeing the statement of cash flows amounts to supporting documentation. Derive the impact of transactions on the statement of cash flows. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR8

56 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting (continued) and Financial Reporting (25–35%) Skill Remembering and Evaluation Analysis Representative task Application Content group/topic Understanding (continued) B. General-purpose financial statements: for-profit business entities 6. Notes to financial Adjust the notes to the financial statements to correct identified errors and omissions. statements Compare the notes to the financial statements to the financial statements and supporting documentation to identify inconsistencies and investigate those inconsistencies. 7. Consolidated Recall basic consolidation concepts and terms (e.g. controlling interest, noncontrolling financial interest, primary beneficiary, variable interest entity). statements (including wholly Prepare consolidated financial statements (includes adjustments, eliminations and/or owned subsidiaries noncontrolling interests) from supporting documentation. and noncontrolling interests) Adjust consolidated financial statements to correct identified errors. Detect, investigate and correct discrepancies identified while agreeing the consolidated financial statement amounts to supporting documentation. 8. Discontinued Prepare the discontinued operations portion of the financial statements from a trial operations balance and supporting documentation. 9. Going concern Recall the requirements for disclosing uncertainties about an entity’s ability to continue as a going concern. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR9

57 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting (continued) and Financial Reporting (25–35%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding C. General-purpose financial statements: nongovernmental, not-for-profit entities 1. Statement of Recall the purpose and objectives of the statement of financial position for a financial position nongovernmental, not-for-profit entity. Prepare a statement of financial position for a nongovernmental, not-for-profit entity from a trial balance and supporting documentation. Adjust the statement of financial position for a nongovernmental, not-for-profit entity to correct identified errors. 2. Statement of Recall the purpose and objectives of the statement of activities for a nongovernmental, activities not-for-profit entity. Prepare a statement of activities for a nongovernmental, not-for-profit entity from a trial balance and supporting documentation. Adjust the statement of activities for a nongovernmental, not-for-profit entity to correct identified errors. 3. Statement of Recall the purpose and objectives of the statement of cash flows for a nongovernmental, cash flows not-for-profit entity. Prepare a statement of cash flows and required disclosures using the direct method for a nongovernmental, not-for-profit entity. Prepare a statement of cash flows and required disclosures using the indirect method for a nongovernmental, not-for-profit entity. Adjust the statement of cash flows for a nongovernmental, not-for-profit entity to correct identified errors. 4. Notes to financial Adjust the notes to the financial statements to correct identified errors and omissions. statements Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR10

58 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting (continued) and Financial Reporting (25–35%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding D. Public company reporting topics (U.S. SEC reporting requirements, earnings per share and segment reporting) Recall the purpose of forms 10-Q, 10-K and 8-K that a U.S. registrant is required to file with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 193 4. Identify the significant components of Form 10-Q and Form 10-K filed with the U.S. Securities and Exchange Commission. Prepare financial statement note disclosures for reportable segments. Calculate basic earnings per share. Calculate diluted earnings per share. E. Financial statements of employee benefit plans Identify the required financial statements for a defined benefit pension plan and a defined contribution pension plan. Prepare a statement of changes in net assets available for benefits for a defined benefit pension plan and a defined contribution pension plan. Prepare a statement of net assets available for benefits for a defined benefit pension plan and a defined contribution pension plan. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR11

59 Financial Accounting and Reporting (FAR) Area I — Conceptual Framework, Standard-Setting (continued) and Financial Reporting (25–35%) Skill Remembering and Analysis Representative task Evaluation Application Content group/topic Understanding F. Special purpose frameworks Recall appropriate financial statement titles to be used for the financial statements prepared under a special purpose framework. Perform calculations to convert cash basis or modified cash basis financial statements to accrual basis financial statements. Prepare financial statements using the cash basis of accounting. Prepare financial statements using a modified cash basis of accounting. Prepare financial statements using the income tax basis of accounting. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR12

60 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (30–4 0%) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding A. Cash and cash equivalents Calculate cash and cash equivalents balances to be reported in the financial statements. Reconcile the cash balance per the bank statement to the general ledger. Investigate unreconciled cash balances to determine whether an adjustment to the general ledger is necessary. B. Trade receivables Calculate trade receivables and allowances and prepare journal entries. Prepare any required journal entries to record the transfer of trade receivables (secured borrowings, factoring, assignment, pledging). Prepare a rollforward of the trade receivables account balance using various sources of information. Reconcile and investigate differences between the subledger and general ledger for trade receivables to determine whether an adjustment is necessary. C. Inventory Calculate the carrying amount of inventory and prepare journal entries using various costing methods. Measure impairment losses on inventory. Prepare a rollforward of the inventory account balance using various sources of information. Reconcile and investigate differences between the subledger and general ledger for inventory to determine whether an adjustment is necessary. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR13

61 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (continued) (30–40%) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding D. Property, plant and equipment Calculate the gross and net property, plant and equipment balances and prepare journal entries. Calculate gains or losses on the disposal of long-lived assets to be recognized in the financial statements. Measure impairment losses on long-lived assets to be recognized in the financial statements. Calculate the amounts necessary to prepare journal entries to record a nonmonetary exchange. Determine whether an asset qualifies to be reported as held for sale in the financial statements. Adjust the carrying amount of assets held for sale and calculate the loss to be recognized in the financial statements. Prepare a rollforward of the property, plant and equipment account balance using various sources of information. Reconcile and investigate differences between the subledger and general ledger for property, plant and equipment to determine whether an adjustment is necessary. E. Investments 1. Financial assets Identify investments that are eligible or required to be reported at fair value in the at fair value financial statements. Calculate the carrying amount of investments measured at fair value and prepare journal entries (excluding impairment). Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR14

62 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (continued) (30–40%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding E. Investments (continued) 1. Financial assets Calculate gains and losses to be recognized in net income or other comprehensive income at fair value, for investments measured at fair value and prepare journal entries. (continued) Calculate investment income to be recognized in net income for investments measured at fair value and prepare journal entries. Measure impairment losses to be recognized on applicable investments reported at fair value in the financial statements. 2. Financial assets Identify investments that are eligible to be reported at amortized cost in the financial at amortized cost statements. Calculate the carrying amount of investments measured at amortized cost and prepare journal entries (excluding impairment). Measure impairment losses to be recognized on investments reported at amortized cost in the financial statements. 3. Equity method Identify when the equity method of accounting can be applied to an investment. investments Calculate the carrying amount of equity method investments and prepare journal entries (excluding impairment). Measure impairment losses to be recognized in the financial statements on equity method investments. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR15

63 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (continued) (30–40%) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding F. Intangible assets – goodwill and other Identify the criteria for recognizing intangible assets in the statement of financial position and classify intangible assets as either finite-lived or indefinite-lived. Identify impairment indicators for goodwill and other indefinite-lived intangible assets. Calculate the carrying amount of finite-lived intangible assets reported in the financial statements (initial measurement, amortization and impairment) and prepare journal entries. Calculate the carrying amount of goodwill and other indefinite-lived intangible assets reported in the financial statements (includes initial measurement and impairment) and prepare journal entries. G. Payables and accrued liabilities Calculate the carrying amount of payables and accrued liabilities and prepare journal entries. Identify and calculate liabilities arising from exit or disposal activities and determine the timing of recognition in the financial statements. Calculate the liabilities and assets resulting from asset retirement obligations and prepare journal entries. Reconcile and investigate differences between the subledger and general ledger for accounts payable and accrued liabilities to determine whether an adjustment is necessary. H. Long-term debt (financial liabilities) 1. Notes and bonds Classify a change to a debt instrument as either a modification of terms or an extinguishment of debt. payable Understand when a change to the terms of a debt instrument qualifies as a troubled debt restructuring. Classify a financial instrument as either debt or equity, based on its characteristics. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR16

64 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (continued) (30–40%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding H. Long-term debt (financial liabilities) (continued) 1. Notes and Calculate the interest expense attributable to notes and bonds payable reported in the financial bonds payable, statements (including discounts, premiums or debt issuance costs). (continued) Calculate the carrying amount of notes and bonds payable and prepare journal entries. 2. Debt covenant Perform debt covenant calculations as stipulated in a debt agreement to ascertain compliance. compliance I. Equity Prepare journal entries to recognize equity transactions in the financial statements. Calculate net asset balances for a nongovernmental, not-for-profit entity and prepare journal entries. J. Revenue recognition Recall concepts of accounting for revenue. Determine the amount and timing of revenue to be recognized under a contract and prepare journal entries. Determine revenue to be recognized by a nongovernmental, not-for-profit entity for contributed services received and prepare journal entries. Interpret agreements, contracts and/or other supporting documentation to determine the amount and timing of revenue to be recognized in the financial statements. Reconcile and investigate differences between the sales subledger and the general ledger to determine whether an adjustment is necessary. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR17

65 Financial Accounting and Reporting (FAR) Area II — Select Financial Statement Accounts (continued) (30–40%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding K. Compensation and benefits 1. Compensated Calculate the carrying amount of the liability for compensated absences and prepare journal absences entries. 2. Retirement Use actuarial outputs to calculate the costs and the funded status for a defined benefit benefits pension plan or a defined benefit postretirement plan and prepare journal entries. 3. Stock Recall concepts associated with share-based payment arrangements (grant date, vesting compensation conditions, inputs to valuation techniques, valuation models). (share-based payments) Calculate compensation costs to be recognized for a share-based payment arrangement classified as equity and prepare journal entries. Calculate compensation costs to be recognized for a share-based payment arrangement classified as a liability and prepare journal entries. L. Income taxes Recall the accounting treatment for uncertainty in income taxes. Recall the criteria for recognizing or adjusting a valuation allowance for a deferred tax asset in the financial statements. Calculate the income tax expense, current taxes payable/receivable and deferred tax liabilities/assets to be reported in the financial statements. Prepare journal entries to record the tax provision in the financial statements. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR18

66 Financial Accounting and Reporting (FAR) Area III — Select Transactions (20–30%) Skill Remembering and Analysis Evaluation Application Representative task Content group/topic Understanding A. Accounting changes and error corrections Calculate a required adjustment to the financial statements due to an accounting change or error correction and determine whether it requires prospective or retrospective application. Derive the impact to the financial statements and related note disclosures of an accounting change or an error correction. B. Business combinations Prepare journal entries to record the identifiable net assets acquired in a business combination that results in the recognition of goodwill. Prepare journal entries to record the identifiable net assets acquired in a business combination that includes a noncontrolling interest. Prepare journal entries to record the identifiable net assets acquired in a business combination that results in the recognition of a bargain purchase gain. Adjust the financial statements to properly reflect changes in contingent consideration related to a business combination. Calculate the consideration transferred in a business combination. Adjust the financial statements to properly reflect measurement period adjustments related to a business combination. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR19

67 Financial Accounting and Reporting (FAR) Area III — Select Transactions (20–30%) (continued) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding C. Contingencies and commitments Recall the recognition and disclosure criteria used to identify commitments and contingencies. Calculate amounts of contingencies and prepare journal entries. Review supporting documentation to determine whether a commitment or contingency requires recognition or disclosure in the financial statements. D. Derivatives and hedge accounting (e.g., swaps. options, forwards) Identify the characteristics of a freestanding and/or embedded derivative financial instrument to be recognized in the financial statements. Identify the criteria necessary to qualify for hedge accounting. Prepare journal entries for hedging transactions. Prepare journal entries for derivative financial instruments (swaps, options and forwards). E. Foreign currency transactions and translation Recall the basic functional currency concepts including the indicators to be considered when determining an entity's functional currency. Calculate transaction gains or losses recognized from monetary transactions denominated in a foreign currency. Adjust an entity's financial statements (local currency to functional currency or functional currency to reporting currency) and recognize the effect on equity through net income or other comprehensive income. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR20

68 Financial Accounting and Reporting (FAR) Area III — Select Transactions (20–30%) (continued) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding F. Leases Recall the appropriate accounting treatment for residual value guarantees, purchase options and variable lease payments included in leasing arrangements. Identify the criteria for classifying a lease arrangement. Calculate the carrying amount of lease-related assets and liabilities and prepare journal entries that a lessee should record. Calculate the carrying amount of lease-related assets and prepare journal entries that a lessor should record. Calculate the lease costs that a lessee should recognize in the income statement. Prepare journal entries that the seller/lessee should record for a sale-leaseback transaction. Calculate the amount of lease income that a lessor should recognize in the income statement. Interpret agreements, contracts and/or other supporting documentation to determine the appropriate accounting treatment of a leasing arrangement and prepare the journal entries that the lessee should record. G. Nonreciprocal transfers Recall the recognition requirements associated with conditional and unconditional promises to give (pledges) for a nongovernmental, not-for-profit entity. Identify transfers to a nongovernmental, not-for-profit entity acting as an agent or intermediary that are not recognized as contributions in the statement of activities. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR21

69 Financial Accounting and Reporting (FAR) Area III — Select Transactions (20–30%) (continued) Skill Remembering and Analysis Evaluation Application Representative task Content group/topic Understanding G. Nonreciprocal transfers (continued) Calculate the carrying amount of donated assets (financial assets or long-lived assets) to be reported in the statement of financial position. Calculate increases in net assets attributable to contributions for a nongovernmental, not-for-profit entity. H. Research and development costs Identify research and development costs and classify the costs as an expense in the financial statements. Calculate the research and development costs to be reported as an expense in the financial statements. I. Software costs Identify the criteria necessary to capitalize software costs (software for internal use or sale) in the financial statements. Calculate capitalized software costs (software for internal use or sale) to be reported in the financial statements and the related amortization expense. J. Subsequent events Identify a subsequent event and recall its appropriate accounting treatment. Calculate required adjustments to financial statements and/or note disclosures based on identified subsequent events. Derive the impact to the financial statements and required note disclosures due to identified subsequent events. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR22

70 Financial Accounting and Reporting (FAR) Area III — Select Transactions (20–30%) (continued) Skill Remembering and Representative task Evaluation Analysis Application Content group/topic Understanding K. Fair value measurements Identify the valuation techniques used to measure fair value. Use the fair value hierarchy to determine the classification of a fair value measurement. Use the fair value concepts (e.g. highest and best use, market participant assumptions, unit of account) to measure the fair value of assets and liabilities. L. Differences between IFRS and U.S. GAAP Identify accounting and reporting differences between IFRS and U.S. GAAP. Determine the impact of the differences between IFRS and U.S. GAAP on the financial statements. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR23

71 Financial Accounting and Reporting (FAR) Area IV — State and Local Governments (5-15%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding A. State and local government concepts 1. Conceptual Recall the purpose and characteristics of the conceptual framework for state and local framework governments. 2. Measurement focus Recall the measurement focus and basis of accounting used by state and local and basis of governments for fund and government-wide financial reporting. accounting 3. Purpose of funds Determine the appropriate fund(s) that a state or local government should use to record its activities. B. Format and content of the financial section of the comprehensive annual financial report (CAFR) 1. Government-wide Identify and recall basic concepts and principles associated with government-wide financial statements financial statements (e.g., required activities, financial statements and financial statement components). Prepare the government-wide statement of net position for a state or local government from trial balances and supporting documentation. Prepare the government-wide statement of activities for a state or local government from trial balances and supporting documentation. 2. Governmental funds Identify and recall basic concepts and principles associated with governmental fund financial statements financial statements (e.g., required funds, financial statements and financial statement components). Prepare the statement of revenues, expenditures and changes in fund balances for the governmental funds of a state or local government from trial balances and supporting documentation. Prepare the balance sheet for the governmental funds of a state or local government from trial balances and supporting documentation. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR24

72 Financial Accounting and Reporting (FAR) Area IV — State and Local Governments (5-15%) (continued) Skill Remembering and Representative task Evaluation Application Analysis Content group/topic Understanding B. Format and content of the financial section of the comprehensive annual financial report (CAFR) (continued) 3. Proprietary funds Identify and recall basic concepts and principles associated with proprietary fund financial statements financial statements (e.g., required funds, financial statements and financial statement components). Prepare the statement of revenues, expenses and changes in fund net position for the proprietary funds of a state or local government from trial balances and supporting documentation. Prepare the statement of net position for the proprietary funds of a state or local government from trial balances and supporting documentation. Prepare the statement of cash flows for the proprietary funds of a state or local government. 4. Fiduciary funds Identify and recall basic concepts and principles associated with fiduciary fund financial statements financial statements (e.g., required funds, financial statements and financial statement components). Prepare the statement of changes in fiduciary net position for the fiduciary funds of a state or local government from trial balances and supporting documentation. Prepare the statement of net position for the fiduciary funds of a state or local government from trial balances and supporting documentation. Recall the disclosure requirements for the notes to the basic financial statements of state and 5. Notes to financial local governments. statements Recall the objectives and components of management's discussion and analysis in the 6. Management’s comprehensive annual financial report for state and local governments. discussion and analysis Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR25

73 Financial Accounting and Reporting (FAR) Area IV — State and Local Governments (5-15%) (continued) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding B. Format and content of the financial section of the comprehensive annual financial report (CAFR) (continued) 7. Budgetary Recall the objectives and components of budgetary comparison reporting in the comprehensive comparison annual financial report for state and local governments. reporting 8. Required supplementary information Recall the objectives and components of required supplementary information other than (RSI) other than management’s discussion and analysis in the comprehensive annual financial report for management’s state and local governments. discussion and analysis 9. Financial reporting entity, including Recall the criteria for classifying an entity as a component unit of a state or local blended and government and the financial statement presentation requirements (discrete or blended). discrete component units C. Deriving government-wide financial statements and reconciliation requirements Prepare worksheets to convert the governmental fund financial statements to the governmental activities reported in the government-wide financial statements. Prepare the schedule to reconcile the total fund balances and the net change in fund balances reported in the governmental fund financial statements to the net position and change in net position reported in the government-wide financial statements. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR26

74 Financial Accounting and Reporting (FAR) Area IV — State and Local Governments (5-15%) (continued) Skill Remembering and Analysis Representative task Evaluation Application Content group/topic Understanding D. Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements 1. Net position and Calculate the net position balances (unrestricted, restricted and net investment in capital components thereof assets) for state and local governments and prepare journal entries. Calculate the fund balances (assigned, unassigned, nonspendable, committed and 2. Fund balances and restricted) for state and local governments and prepare journal entries. components thereof 3. Capital assets and Identify capital assets reported in the government-wide financial statements of state and infrastructure local governments. assets Calculate the net general capital assets balance for state and local governments and prepare journal entries (initial measurement and subsequent depreciation and amortization). 4. General and Identify general and proprietary long-term liabilities reported in the government-wide proprietary financial statements of state and local governments. long-term liabilities Calculate the total indebtedness to be reported in the government-wide financial statements of a state or local government. Calculate the net general long-term debt balance for state and local governments and prepare journal entries (debt issuance, interest payments, issue premiums or issue discounts). 5. Interfund activity, Prepare eliminations of interfund activity in the government-wide financial statements including transfers of state and local governments. Prepare journal entries to recognize interfund activity within state and local governments. Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR27

75 Financial Accounting and Reporting (FAR) Area IV — State and Local Governments (5-15%) (continued) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding D. Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements (continued) 6. Nonexchange Calculate the amount of nonexchange revenue to be recognized by state and local revenue governments using the modified accrual basis of accounting and prepare journal entries. transactions Calculate the amount of nonexchange revenue to be recognized by state and local governments using the accrual basis of accounting and prepare journal entries. 7. Expenditures and Calculate expenditures to be recognized under the modified accrual basis of accounting expenses (paid from available fund financial resources) for state and local governments and prepare journal entries. Calculate expenses to be recognized under the accrual basis of accounting for state and local governments and prepare journal entries. 8. Special items Identify transactions that require presentation as special items in government-wide financial statements for state and local governments. Recall and explain the types of budgets used by state and local governments. 9. Budgetary accounting and encumbrances Prepare journal entries to record budgets (original and final) of state and local governments. Prepare journal entries to record encumbrances of state and local governments. Calculate the amount to be reported as other financing sources and other financing uses in 10. Other financing the governmental funds financial statements. sources and uses Uniform CPA Examination Blueprints: Financial Accounting and Reporting (FAR) FAR28

76 Uniform CPA Examination Regulation (REG) Blueprint Uniform CPA Examination Blueprints: Regulation (REG) REG1

77 Section introduction Regulation Content allocation The Regulation (REG) section of the Uniform CPA Examination (the Exam) tests the knowledge and skills that a newly licensed CPA must demonstrate with The following table summarizes the content areas and the allocation of content respect to: tested in the REG section of the Exam: federal taxation • U.S. • U.S. ethics and professional responsibilities related to tax practice Content area Allocation • U.S. business law Ethics, Professional Responsibilities and Area I 10–20% A listing of reference materials relevant to the REG section of the Exam are Federal Tax Procedures included under References at the conclusion of this introduction. Business Law 10–20% Area II Content organization and tasks The REG section blueprint is organized by content AREA, content GROUP 12–22% Area III Federal Taxation of Property Transactions and content TOPIC. Each topic includes one or more representative TASKS that a newly licensed CPA may be expected to complete when performing tax Area IV 15 -25% Federal Taxation of Individuals preparation services, tax advisory services or other responsibilities of a CPA. The tasks in the blueprint are representative. They are not intended to be (nor 28-38% Area V Federal Taxation of Entities should they be viewed as) an all-inclusive list of tasks that may be tested in the REG section of the Exam. Additionally, it should be noted that the number of Overview of content areas tasks associated with a particular content group or topic is not indicative of the Area I of the REG section blueprint covers several topics, including the following: extent such content group, topic or related skill level will be assessed on the – Requirements based on Treasury • Ethics and Responsibilities in Tax Practice Exam. Similarly, examples provided within the task statements should not be Department Circular 230 and the rules and regulations for tax return preparers viewed as all-inclusive. • Licensing and Disciplinary Systems – Requirements of state boards of accountancy to obtain and maintain the CPA license – Understanding federal tax processes and • Federal Tax Procedures procedures, including appropriate disclosures, substantiation, penalties and authoritative hierarchy • Legal Duties and Responsibilities – Understanding legal issues that affect the CPA and his or her practice Uniform CPA Examination Blueprints: Regulation (REG) REG2

78 Section introduction (continued) Regulation Area II of the REG section blueprint covers several topics of Business Law, Skill allocation including the following: The Exam focuses on testing higher order skills. Based on the nature of the task, each representative task in the REG section blueprint is assigned a skill level. REG • Knowledge and understanding of the legal implications of business section considerations related to the skill levels are discussed below. transactions, particularly as they relate to accounting, auditing and financial reporting Skill levels • Areas of agency, contracts, debtor-creditor relationships, government regulation of business, and business structure The examination or assessment of problems, and - The Uniform Commercial Code under the topics of contracts and Evaluation use of judgment to draw conclusions. debtor-creditor relationships - Nontax-related business structure content. Area V of the REG section The examination and study of the interrelationships of separate areas in order to identify causes and find blueprint covers the tax-related issues of the various business structures Analysis evidence to support inferences. Federal and widely adopted uniform state laws and references as identified • in References below. The use or demonstration of knowledge, concepts Application or techniques. Area III, Area IV and Area V of the REG section blueprint cover various topics of federal income taxation and gift and estate tax. Accounting methods and The perception and comprehension of the Remembering and periods, and tax elections are included in the Areas listed below: significance of an area utilizing knowledge gained. Understanding • Area III covers the federal income taxation of property transactions. Area III also covers topics related to federal estate and gift taxation. • Remembering and understanding is mainly concentrated in Area I and Area II. • Area IV covers the federal income taxation of individuals from both a tax These two areas contain the general ethics, professional responsibilities and preparation and tax planning perspective. business law knowledge that is required for newly licensed CPAs and is tested at the lower end of the skill level continuum • Area V covers the federal income taxation of entities including sole proprietorships, partnerships, limited liability companies, C corporations, • Application and analysis skills are primarily tested in Areas III, IV and V. These S corporations, joint ventures, trusts, estates and tax-exempt organizations, three areas contain more of the day-to-day tasks that newly licensed CPAs are from both a tax preparation and tax planning perspective. expected to perform and therefore are tested at the higher end of the skill level continuum The representative tasks combine both the applicable content knowledge and the skills required in the context of the work that a newly licensed CPA would reasonably be expected to perform. The REG section does not test any content at the Evaluation skill level as newly licensed CPAs are not expected to demonstrate that level of skill in regards to the REG content. Uniform CPA Examination Blueprints: Regulation (REG) REG3

79 Section introduction (continued) Regulation References – Regulation • Revised Model Business Corporation Act • Revised Uniform Limited Partnership Act • Revised Uniform Partnership Act • Securities Act of 1933 • Securities Exchange Act of 1934 • Uniform Accountancy Act • Uniform Commercial Code • Internal Revenue Code of 1986, as amended • Treasury Department Circular 230 • Treasury Regulations • Other administrative pronouncements regarding federal taxation • Case law on federal taxation • Public Law 86-272 • Uniform Division of Income for Tax Purposes Act (UDITPA) • Current textbooks covering business law, federal taxation, auditing, accounting and ethics Uniform CPA Examination Blueprints: Regulation (REG) REG4

80 Uniform CPA Examination Regulation (REG) Summary blueprint Content area allocation Weight I. Ethics, Professional Responsibilities and Federal Tax Procedures 10–20% II. Business Law 10–20% III. Federal Taxation of Property Transactions 12–2 2% IV. Federal Taxation of Individuals 15–25 % V. Federal Taxation of Entities 28–38% Weight Skill allocation Evaluation — Analysis 25–35% Application 35–45% Remembering and Understanding 25–35% Uniform CPA Examination Blueprints: Regulation (REG) REG5

81 Uniform CPA Examination Regulation (REG) Area I — Ethics, Professional Responsibilities and Federal Tax Procedures (10-20%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Ethics and responsibilities in tax practice 1. Regulations Recall the regulations governing practice before the Internal Revenue Service. governing practice before the Apply the regulations governing practice before the Internal Revenue Service given Internal a specific scenario. Revenue Service 2. Internal Revenue Recall who is a tax return preparer. Code and Regulations related Recall situations that would result in federal tax return preparer penalties. to tax return preparers Apply potential federal tax return preparer penalties given a specific scenario. B. Licensing and disciplinary systems Understand and explain the role and authority of state boards of accountancy. C. Federal tax procedures 1. Audits, appeals Explain the audit and appeals process as it relates to federal tax matters. and judicial process Explain the different levels of the judicial process as they relate to federal tax matters. Identify options available to a taxpayer within the audit and appeals process given a specific scenario. Identify options available to a taxpayer within the judicial process given a specific scenario. Uniform CPA Examination Blueprints: Regulation (REG) REG6

82 Uniform CPA Examination Regulation (REG) Area I — Ethics, Professional Responsibilities (continued) and Federal Tax Procedures (10-20%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding (continued) C. Federal tax procedures 2. Substantiation Summarize the requirements for the appropriate disclosure of a federal tax return and disclosure position. of tax positions Identify situations in which disclosure of federal tax return positions is required. Identify whether substantiation is sufficient given a specific scenario. Recall situations that would result in taxpayer penalties relating to federal tax returns. 3. Taxpayer penalties Calculate taxpayer penalties relating to federal tax returns. 4. Authoritative Recall the appropriate hierarchy of authority for federal tax purposes. hierarchy D. Legal duties and responsibilities 1. Common law Summarize the tax return preparer’s common law duties and liabilities to clients and duties and third parties. liabilities to clients and third Identify situations which result in violations of the tax return preparer’s common law duties parties and liabilities to clients and third parties. 2. Privileged Summarize the rules regarding privileged communications as they relate to tax practice. communications, confidentiality and privacy acts Identify situations in which communications regarding tax practice are considered privileged. Uniform CPA Examination Blueprints: Regulation (REG) REG7

83 Uniform CPA Examination Regulation (REG) Area II — Business Law (10-20%) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding A. Agency 1. Authority of agents Recall the types of agent authority. and principals Identify whether an agency relationship exists given a specific scenario. 2. Duties and Explain the various duties and liabilities of agents and principals. liabilities of agents and principals Identify the duty or liability of an agent or principal given a specific scenario. B. Contracts 1. Formation Summarize the elements of contract formation between parties. Identify whether a valid contract was formed given a specific scenario. Identify different types of contracts (e.g., written, verbal, unilateral, express, implied, etc.) given a specific scenario. 2. Performance Explain the rules related to the fulfillment of performance obligations necessary for an executed contract. Identify whether both parties to a contract have fulfilled their performance obligation given a specific scenario. Uniform CPA Examination Blueprints: Regulation (REG) REG8

84 Uniform CPA Examination Regulation (REG) (continued) Area II — Business Law (10-20%) Skill Remembering and Representative task Evaluation Application Analysis Content group/topic Understanding B. Contracts (continued) 3. Discharge, breach Explain the different ways in which a contract can be discharged (e.g., performance, and remedies agreement, operation of the law, etc.). Summarize the different remedies available to a party for breach of contract. Identify situations involving breach of contract. Identify whether a contract has been discharged given a specific scenario. Identify the remedy available to a party for breach of contract given a specific scenario. C. Debtor-creditor relationships 1. Rights, duties Explain the rights, duties and liabilities of debtors, creditors and guarantors. and liabilities of debtors, Identify rights, duties or liabilities of debtors, creditors or guarantors given a specific creditors scenario. and guarantors 2. Bankruptcy and Explain the rights of the debtors and the creditors in bankruptcy and insolvency. insolvency Summarize the rules related to the different types of bankruptcy. Explain discharge of indebtedness in bankruptcy. Identify the rights of the debtors and the creditors in bankruptcy and insolvency given a specific scenario. Identify the type of bankruptcy described in a specific scenario. Uniform CPA Examination Blueprints: Regulation (REG) REG9

85 Uniform CPA Examination Regulation (REG) (continued) Area II — Business Law (10-20%) Skill Remembering and Representative task Evaluation Application Analysis Content group/topic Understanding C. Debtor-creditor relationships (continued) 3. Secured Explain how property can serve as collateral in secured transactions. transactions Summarize the priority rules of secured transactions. Explain the requirements needed to create and perfect a security interest. Identify the prioritized ordering of perfected security interests given a specific scenario. Identify whether a creditor has created and perfected a security interest given a specific scenario. D. Government regulation of business 1. Federal securities Summarize the various securities laws and regulations that affect corporate governance regulation with respect to the federal Securities Act of 1933 and federal Securities Exchange Act of 193 4. Identify violations of the various securities laws and regulations that affect corporate governance with respect to the federal Securities Act of 1933 and federal Securities Exchange Act of 1934. 2. Other federal Summarize federal laws and regulations, for example, employment tax, qualified health plans laws and and worker classification federal laws and regulations. regulations (e.g., employment tax, qualified health Identify violations of federal laws and regulations, for example, employment tax, qualified plans and worker health plans and worker classification federal laws and regulations. classification) Uniform CPA Examination Blueprints: Regulation (REG) REG10

86 Uniform CPA Examination Regulation (REG) Area II — Business Law (10-20%) (continued) Skill Remembering and Evaluation Representative task Analysis Application Content group/topic Understanding E. Business structure 1. Selection and Summarize the processes for formation and termination of various business entities. formation of business entity Summarize the non-tax operational features for various business entities. and related operation Identify the type of business entity that is best described by a given set of and termination nontax-related characteristics. Summarize the rights, duties, legal obligations and authority of owners and management. 2. Rights, duties, legal obligations and authority Identify the rights, duties, legal obligations or authorities of owners or management given a of owners and specific scenario. management Uniform CPA Examination Blueprints: Regulation (REG) REG11

87 Uniform CPA Examination Regulation (REG) Area III — Federal Taxation of Property Transactions (12-2 2 %) Skill Remembering and Representative task Application Analysis Evaluation Content group/topic Understanding A. Acquisition and disposition of assets 1. Basis and holding Calculate the tax basis of an asset. period of assets Determine the holding period of a disposed asset for classification of tax gain or loss. 2. Taxable and Calculate the realized and recognized gain or loss on the disposition of assets for federal income nontaxable tax purposes. dispositions Calculate the realized gain, recognized gain and deferred gain on like-kind property exchange transactions for federal income tax purposes. Analyze asset sale and exchange transactions to determine whether they are taxable or nontaxable. 3. Amount and Calculate the amount of capital gains and losses for federal income tax purposes. character of gains and losses, and netting process Calculate the amount of ordinary income and loss for federal income tax purposes. (including installment sales) Calculate the amount of gain on an installment sale for federal income tax purposes. Review asset transactions to determine the character (capital vs. ordinary) of the gain or loss for federal income tax purposes. Analyze an agreement of sale of an asset to determine whether it qualifies for installment sale treatment for federal income tax purposes. Uniform CPA Examination Blueprints: Regulation (REG) REG12

88 Uniform CPA Examination Regulation (REG) Area III — Federal Taxation of Property Transactions (continued) (12-22%) Skill Remembering and Evaluation Application Analysis Representative task Content group/topic Understanding A. Acquisition and disposition of assets (continued) 4. Related party Recall related parties for federal income tax purposes. transactions (including imputed Recall the impact of related party ownership percentages on acquisition and disposition interest) transactions of property for federal income tax purposes. Calculate the direct and indirect ownership percentages of corporation stock to determine whether there are related parties for federal income tax purposes. Calculate a taxpayer’s basis in an asset that was disposed of at a loss to the taxpayer by a related party. Calculate a taxpayer’s gain or loss on a subsequent disposition of an asset to an unrelated third party that was previously disposed of at a loss to the taxpayer by a related party. Calculate the impact of imputed interest on related party transactions for federal tax purposes. B. Cost recovery (depreciation, depletion and amortization) Calculate tax depreciation for tangible business property and tax amortization of intangible assets. Calculate depletion for federal income tax purposes. Compare the tax benefits of the different expensing options for tax depreciation for federal income tax purposes. Reconcile the activity in the beginning and ending accumulated tax depreciation account. Uniform CPA Examination Blueprints: Regulation (REG) REG13

89 Uniform CPA Examination Regulation (REG) Area III — Federal Taxation of Property Transactions (continued) (12-22%) Skill Remembering and Evaluation Application Analysis Representative task Content group/topic Understanding C. Estate and gift taxation 1. Transfers subject Recall transfers of property subject to federal gift tax. to gift tax Recall whether federal Form 709 — United States Gift (and Generation-Skipping Transfer) is required to be filed. Tax Return Calculate the amount and classification of a gift for federal gift tax purposes. Calculate the amount of a gift subject to federal gift tax. 2. Gift tax annual Recall allowable gift tax deductions and exclusions for federal gift tax purposes. exclusion and gift tax deductions Recall situations involving the gift tax annual exclusion, gift-splitting and the impact on the use of the lifetime exclusion amount for federal gift tax purposes. Compute the amount of taxable gifts for federal gift tax purposes. 3. Determination Recall assets includible in a decedent’s estate for federal estate tax purposes. of taxable estate Recall allowable estate tax deductions in a decedent’s estate. Calculate the taxable estate for federal estate tax purposes. Calculate the gross estate for federal estate tax purposes. Calculate the allowable estate tax deductions for federal estate tax purposes. Uniform CPA Examination Blueprints: Regulation (REG) REG14

90 Uniform CPA Examination Regulation (REG) Area IV — Federal Taxation of Individuals (including tax preparation and planning strategies) (15-25%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Gross income (inclusions and exclusions) Calculate the amounts that should be included in, or excluded from, an individual’s gross income as reported on federal Form 1040 — U.S. Individual Income Tax Return. Analyze projected income for use in tax planning in future years. Analyze client-provided documentation to determine the appropriate amount of gross income to be reported on federal Form 1040 — U.S. Individual Income Tax Return . B. Reporting of items from pass-through entities Prepare federal Form 1040 — based on the information U.S. Individual Income Tax Return provided on Schedule K-1. C. Adjustments and deductions to arrive at adjusted gross income and taxable income Calculate the amount of adjustments and deductions to arrive at adjusted gross income and taxable income on federal Form 1040 — U.S. Individual Income Tax Return. Calculate the qualifying business income (QBI) deduction for federal income tax purposes. Analyze client-provided documentation to determine the validity of the deductions taken to arrive at adjusted gross income or taxable income on federal Form 1040 — U.S. Individual Income Tax Return. D. Passive activity losses (excluding foreign tax credit implications) Recall passive activities for federal income tax purposes. Calculate net passive activity gains and losses for federal income tax purposes. Prepare a loss carryforward schedule for passive activities for federal income tax purposes. Calculate utilization of suspended losses on the disposition of a passive activity for federal income tax purposes. Uniform CPA Examination Blueprints: Regulation (REG) REG15

91 Uniform CPA Examination Regulation (REG) Area IV – Federal Taxation of Individuals (including (continued) tax preparation and planning strategies) (15-25%) Skill Remembering and Analysis Evaluation Application Representative task Content group/topic Understanding E. Loss limitations Calculate loss limitations for federal income tax purposes for an individual taxpayer. Analyze projections to effectively minimize loss limitations for federal income tax purposes for an individual taxpayer. Determine the basis and the potential application of at-risk rules that can apply to activities for federal income tax purposes. F. Filing status Recall taxpayer filing status for federal income tax purposes. Recall relationships meeting the definition of dependent for purposes of determining taxpayer filing status. Identify taxpayer filing status for federal income tax purposes given a specific scenario. G. Computation of tax and credits Recall and define minimum requirements for individual federal estimated tax payments to avoid penalties. Calculate the tax liability based on an individual’s taxable income for federal income tax purposes. Calculate the impact of the tax deductions and tax credits and their effect on federal Form . U.S. Individual Income Tax Return 1040 — Uniform CPA Examination Blueprints: Regulation (REG) REG16

92 Uniform CPA Examination Regulation (REG) Area IV – Federal Taxation of Individuals (including (continued) tax preparation and planning strategies) (15-25%) Skill Remembering and Representative task Evaluation Analysis Application Content group/topic Understanding H. Alternative minimum tax Recall income and expense items includible in the computation of an individual taxpayer’s alternative minimum taxable income (AMTI). Calculate alternative minimum tax (AMT) for an individual taxpayer. Uniform CPA Examination Blueprints: Regulation (REG) REG17

93 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax preparation and planning strategies) (28-38%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding A. Tax treatment of formation and liquidation of business entities Calculate the realized and recognized gain for the owner and entity upon the formation and liquidation of business entities for federal income tax purposes. Compare the tax implications of liquidating distributions from different business entities. Analyze the tax advantages and disadvantages in the formation of a new business entity. B. Differences between book and tax income (loss) Identify permanent vs. temporary differences to be reported on Schedule M-1 and/or M-3. Calculate the book/tax differences to be reported on a Schedule M-1 or M-3. Prepare a Schedule M-1 or M-3 for a business entity. Reconcile the differences between book and taxable income (loss) of a business entity. C. C corporations 1. Computations Calculate taxable income and tax liability for a C corporation. of taxable income, tax liability and allowable credits Calculate the credits allowable as a reduction of tax for a C corporation. Uniform CPA Examination Blueprints: Regulation (REG) REG18

94 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax (continued) preparation and planning strategies) (28-38%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding C. C corporations (continued) 2. Net operating Calculate the current-year net operating or capital loss of a C corporation. losses and capital loss limitations Prepare a net operating and/or capital loss carryforward schedule for a C corporation. Analyze the impact of the charitable contribution and/or dividends received deductions on the net operating loss calculation of a C corporation. Analyze the impact of net operating and/or capital losses during tax planning for a C corporation. 3. Entity/owner Calculate an entity owner’s basis in C corporation stock for federal income tax purposes. transactions, including Calculate the tax gain (loss) realized and recognized by both the shareholders and contributions, the corporation on a contribution or on a distribution in complete liquidation of a loans and C corporation for federal income tax purposes. distributions Calculate the tax gain (loss) realized and recognized on a nonliquidating distribution by both a C corporation and its shareholders for federal income tax purposes. Calculate the amount of the cash distributions to shareholders of a C corporation that represents a dividend, return of capital or capital gain for federal income tax purposes. Reconcile an owner’s beginning and ending basis in C corporation stock for federal income tax purposes. — U.S. Corporation Recall the requirements for filing a consolidated federal Form 1120 4. Consolidated Income Tax Return. tax returns Prepare a consolidated federal Form 1120 — U.S. Corporation Income Tax Return . Calculate federal taxable income for a consolidated federal Form 1120 — U.S. Corporation Income Tax Return . Uniform CPA Examination Blueprints: Regulation (REG) REG19

95 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax (continued) preparation and planning strategies) (28-38%) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding C. C corporations (continued) 5. Multijurisdictional Define the general concept and rationale of nexus with respect to multijurisdictional tax issues transactions. (including consideration Define the general concept and rationale of apportionment and allocation with respect to of local, state and state and local taxation. international tax issues) Explain the difference between a foreign branch and foreign subsidiary with respect to federal income taxation to a U.S. company. Explain how different types of foreign income are sourced in calculating the foreign tax credit for federal income tax purposes. Recall payment sources to determine federal tax withholding requirements. Identify situations where the base erosion and anti-abuse tax (BEAT) would apply. Identify factors that would qualify income as Foreign Derived Intangible Income (FDII). Define the components of Global Intangible Low-Taxed Income (GILTI). identify situations that would create nexus for multijurisdictional transactions. Identify the federal filing requirements of cross border business investments. Calculate the apportionment percentage used in determining state taxable income. Uniform CPA Examination Blueprints: Regulation (REG) REG20

96 Area V – Federal Taxation of Entities (including tax (continued) preparation and planning strategies) (28-38%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding D. S corporations 1. Eligibility Recall eligible shareholders for an S corporation for federal income tax purposes. and election Recall S corporation eligibility requirements for federal income tax purposes. Explain the procedures to make a valid S corporation election for federal income tax purposes. Identify situations in which S corporation status would be revoked or terminated for federal income tax purposes. 2. Determination Calculate ordinary business income (loss) for an S corporation for federal income tax purposes. of ordinary business income (loss) Calculate separately stated items for an S corporation for federal income tax purposes. and separately stated items Analyze both the accumulated adjustment account and the other adjustments account of an S corporation for federal income tax purposes. Analyze the accumulated earnings and profits account of an S corporation that has been converted from a C corporation. Analyze components of S corporation income/deductions to determine classification as ordinary business income (loss) or separately stated items on federal Form 1120S — U.S. Income Tax Return for an S Corporation. 3. Basis of Calculate the shareholder’s basis in S corporation stock for federal income tax purposes. shareholder’s interest Analyze shareholder transactions with an S corporation to determine the impact on the shareholder’s basis for federal income tax purposes. Uniform CPA Examination Blueprints: Regulation (REG) REG21

97 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax preparation and planning strategies) (28-38%) (continued) Skill Remembering and Evaluation Representative task Application Analysis Content group/topic Understanding D. S corporations (continued) Calculate the realized and recognized gain or loss to the shareholder of property contribution 4. Entity/owner to an S corporation. transactions (including Calculate the allocation of S corporation income (loss) after the sale of a shareholder’s contributions, share in the S corporation for federal income tax purposes. loans and distributions) Analyze the shareholder’s impact of an S corporation’s loss in excess of the shareholder’s basis for federal income tax purposes. Analyze the federal income tax implication to the shareholders and the S corporation resulting from shareholder contributions and loans as well as S corporation distributions and loans to shareholders. Recall factors that cause a built-in gains tax to apply for federal income tax purposes. 5. Built-in gains tax Uniform CPA Examination Blueprints: Regulation (REG) REG22

98 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax preparation and planning strategies) (28-38%) (continued) Skill Remembering and Analysis Evaluation Representative task Application Content group/topic Understanding E. Partnerships 1. Determination of Calculate ordinary business income (loss) for a partnership for federal income tax purposes. ordinary business income (loss) and Calculate separately stated items for a partnership for federal income tax purposes. separately stated items Analyze components of partnership income/deductions to determine classification as ordinary business income (loss) or separately stated items on federal Form 1065 — U.S Return of Partnership Income. 2. Basis of partner’s Calculate the partner’s basis in the partnership for federal income tax purposes. interest and basis of assets Calculate the partnership’s basis in assets contributed by the partner for federal income tax contributed purposes. to the partnership Analyze partner contributions to the partnership to determine the impact on the partner’s basis for federal income tax purposes. 3. Partnership and Recall partner elections applicable to a partnership for federal income tax purposes. partner elections 4. Transactions Calculate the tax implications of certain transactions between a partner and partnership between a partner (such as services performed by a partner or loans) for federal income tax purposes. and the partnership Analyze the tax implications of a partner transaction with the partnership (such as services (including services performed by a partner or loans) to determine the impact on the partner’s tax basis for performed by a federal income tax purposes. partner and loans) 5. Impact of Calculate the impact of increases and decreases of partnership liabilities on a partner’s partnership basis for federal income tax purposes. liabilities on a partner’s Analyze the impact of partnership liabilities as they relate to the general partners and interest in a limited partners for federal income tax purposes. partnership Uniform CPA Examination Blueprints: Regulation (REG) REG23

99 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax (continued) preparation and planning strategies) (28-38%) Skill Remembering and Application Evaluation Representative task Analysis Content group/topic Understanding E. Partnerships (continued) Calculate the realized and recognized gains (losses) by the partnership and partners of 6. Distribution of liquidating distributions from the partnership for federal income tax purposes. partnership assets Calculate the realized and recognized gains (losses) by the partnership and partners of nonliquidating distributions from the partnership for federal income tax purposes. Calculate the partner’s basis of partnership assets received in a liquidating distribution for federal income tax purposes. Calculate the partner’s basis of partnership assets received in a nonliquidating distribution for federal income tax purposes. 7. Ownership Recall the situations in which a partnership would be terminated for federal income tax purposes. changes Calculate the allocation of partnership income (loss) after the sale of a partner’s share in the partnership for federal income tax purposes. Calculate the revised basis of partnership assets due to a transfer of a partnership interest for federal income tax purposes. F. Limited liability companies Recall the tax classification options for a limited liability company for federal income tax purposes. G. Trusts and estates 1. Types of trusts Recall and explain the differences between simple and complex trusts for federal income tax purposes. Uniform CPA Examination Blueprints: Regulation (REG) REG24

100 Uniform CPA Examination Regulation (REG) Area V – Federal Taxation of Entities (including tax (continued) preparation and planning strategies) (28-38%) Skill Remembering and Application Analysis Evaluation Representative task Content group/topic Understanding (continued) G. Trusts and estates 2. Income and Calculate the total amount of income items reportable on a federal Form 1041 — U.S. deductions Income Tax Return for Estates and Trusts. Calculate the total amount of deductible expenses reportable on a federal Form 1041 — U.S. Income Tax Return for Estates and Trusts. 3. Determination of beneficiary’s Calculate the beneficiary’s share of taxable income from a trust for federal income share of taxable tax purposes. income H. Tax-exempt organizations 1. Types of Recall the different types of tax-exempt organizations for federal tax purposes. organizations 2. Obtaining and Recall the requirements to qualify as an IRC Section 501(c)(3) tax-exempt organization. maintaining tax-exempt Summarize the federal filing and disclosure requirements to obtain tax-exempt status for an status organization. Summarize the annual federal filing and disclosure requirements for a tax-exempt organization. Explain the requirements necessary for retaining tax-exempt status. Explain the procedures and recall the time period required to obtain tax-exempt status once the status has been revoked. 3. Unrelated Calculate the unrelated business income for a tax-exempt organization for federal income business tax purposes. income Uniform CPA Examination Blueprints: Regulation (REG) REG25

101 Examinations Team American Institute of CPAs 100 Princeton South, Suite 200 Ewing, NJ 08628 888.777.7077 | aicpa.org © 2018 American Institute of Certified Public Accountants. All rights reserved. AICPA and American Institute of CPAs are trademarks of the American Institute of Certified Public Accountants and are registered in the United States, the European Union and other countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants and licensed to AICPA. The Uniform CPA Examination is a registered trademark of the American Institute of Certified Public Accountants and is registered in the United States. 1805-1110 Uniform CPA Examination Blueprints 26

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