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  • (heavy metal music)

  • - We are back.

  • Welcome back to another action-packed edition

  • of CPA Reviewed, the official podcast of another71.com.

  • As always, I'm your humble host, Jeff Elliott,

  • a licensed CPA

  • in the state of Kansas, much to the chagrin of many.

  • Happy Monday to you.

  • Today is Monday, January 11th, 2016.

  • Our first podcast of the year. (giggles)

  • I looked in our last podcast, it was like

  • October 15th (laughs) so,

  • this must be a quarterly thing we've got going on.

  • So we have two things going on right now.

  • We have the audio version, so if you're listening

  • to the podcast,

  • you have

  • no indication that

  • I have not shaved since no shave in November. (laughs)

  • So, well I did a little bit but,

  • I was starting to look homeless and getting questions

  • about being in my building, but...

  • Anyway, so yeah, I got the no shave in November

  • still going on strong, so,

  • my mom hates it, my wife loves it.

  • So you know who wins that battle.

  • On today's show, we're going to cover

  • some CPA exam news.

  • The 2016 CPA exam changes from a

  • 30 thousand

  • foot view

  • and also jump into your questions.

  • So first, the news.

  • Okay, the AICPA released the

  • 2015 CPA exam pass rates

  • and like they do every quarter,

  • some interesting things about that is that

  • well, they released the pass rates but then

  • the NINJAs went back and looked at the

  • pass rates since 2006.

  • And some interesting things,

  • BEC has increased 12 percentage points

  • since 2006

  • so right now BEC's pass rate is around a

  • what, a 55 or 56?

  • Is that right?

  • Back in the day it was like a 43? (chuckles)

  • It's got to be true if...

  • It was one of my bullet points.

  • I probably should have looked at that more closely

  • before hitting the record button, but anyway

  • BEC has jumped up 12 percentage points.

  • Yeah, it's like at a 56 right now,

  • so it used to be 44, 45, somewhere in there.

  • That's interesting.

  • Auditing is...

  • Auditing is kind of strange because if someone told me

  • that they scored a 99 on the exam, on any particular exam,

  • I would say, okay it was auditing.

  • And most of the time that's true.

  • Like I rarely see a 99 for regulation.

  • Maybe one for BEC, maybe for FAR,

  • but I'm not surprised when I see someone score

  • a 99 on auditing anymore.

  • And usually if you see someone gunning for the

  • Elijah Watts Sells Award, they have like a 99

  • on auditing and a 93 on BEC.

  • But usually it's auditing score that anchors

  • that Elijah Watts Sells Award.

  • But oddly enough, possibly ironically,

  • auditing is also

  • also has the lowest pass rates, typically.

  • And

  • but this time, auditing is actually up a little bit,

  • and Q4

  • and it's right in there with FAR.

  • So auditing scores came up.

  • And the AICPA also released the score release timeline

  • for Q1 and it's basically the same

  • timeline as last year,

  • just slap a 2016 on it and adjust

  • for the weekend dates and what not.

  • But

  • you can get the links to the AICPA 2015 pass rates

  • as well as the 2006

  • through 2015 pass rate

  • comparison below this video.

  • If you're watching this on YouTube, just click

  • the link in the description, if you're watching

  • this one another71, it's right below the video,

  • and if you are listening to a podcast

  • you have nothing to click.

  • You can go to my site and see it.

  • Okay, and one other thing about the score release

  • and

  • there's no indication that this will change,

  • but the scores have been coming out at 1:00 a.m. eastern.

  • Why they do that, I really don't know.

  • I think the original intent was that they thought

  • people would just forget about it and go to sleep

  • and then wake up and their scores would be there.

  • But clearly they don't read another71 enough because

  • people, it doesn't matter if you tell them

  • it's coming out at 3:00 a.m.

  • People will be on the site hitting Refresh at 3:00 a.m.

  • So you might as well make it 7:00 p.m., 10:00 p.m.

  • Whatever, the server load is going to be consistent

  • regardless, so let's just let the poor people sleep

  • or get some rest.

  • 2016 CPA exam changes.

  • I'm going to go through this pretty quickly,

  • pretty high lever overview.

  • Basically for BEC there were not any substantial changes,

  • anything that you need to worry about.

  • BEC is good to go.

  • Auditing.

  • The big changes happened in July of 2015 with

  • SSARS 21.

  • So if you have July

  • 2015

  • updates for your auditing course,

  • you're good to go.

  • Regulation, the big changes for regulation

  • happen mid-year.

  • So

  • 2015 tax law has been tested from

  • July 1st 2015

  • through June 30th 2016.

  • June is obviously a dead month, so it's

  • through May 31st 2016.

  • Hope I said that right.

  • June 30th 2016.

  • So basically

  • the 2016 tax law will begin to

  • be tested

  • July 1st of 2016.

  • So,

  • long story short,

  • if your regulation materials

  • are updated, as of July 2015, you're good to go.

  • FAR.

  • FAR was kind of a bear this time around.

  • And as someone who has to

  • do all the exam changes themselves,

  • it was quite an ordeal.

  • I'm glad I started in November

  • so that I got it out before Christmas.

  • But the reason why FAR was kind of a

  • bear this time around was because

  • one of the things in the past we did was they did away

  • with the extraordinary items classification.

  • So they actually did that a while back

  • but it's just now CPA exam testable,

  • and so now

  • any unusual or infrequent items,

  • they either go on the income statement

  • above income from continuing ops

  • or they go in the footnotes.

  • So you have two ways you can do it there.

  • One other little note is that they are no longer shown

  • net of tax.

  • And so when you pull out extraordinary items,

  • Like any, I mean, just think of all the

  • multiple choice questions they had,

  • extraordinary items in them.

  • Any, like all of the example financial statements,

  • they all had to be redone.

  • (mimicking somber violin)

  • But...

  • So anyway,

  • but it's all done now.

  • And it was done before Christmas.

  • And also, bond issuance cost.

  • So before you would...

  • The bond issuance cost would go on the balance sheet.

  • And that is no longer the case.

  • Bond issuance costs reduce

  • the bond carrying value.

  • So that is a change going concern.

  • So if management decides that there's substantial

  • doubt that the entity will continue as a going concern

  • within 12 months of the financial statement issuance date,

  • they have to issue some disclosures.

  • So option A is

  • yeah, there's a problem but we have a plan

  • and we think it's going to work.

  • Here is the problem, here's our plan,

  • and here's why we think it's going to work,

  • here's our disclosures.

  • Or, yeah,

  • there's a problem, we have a plan,

  • we don't think it's going to work

  • here's why it's not going to work

  • here's the problem, and here's our disclosures.

  • So those are now the two options.

  • If there is substantial doubt about any entity's

  • ability to continue as a going concern.

  • What else?

  • Oh, governmental accounting.

  • Governmental accounting had some

  • some stuff added to it.

  • Fair value measurements for investments and liabilities,

  • so there's some stuff in there.

  • Also the way that you measure donated items are in there.

  • There's also now a gap hierarchy for state

  • and local governments.

  • And basically

  • there's two types, authoritative and non-authoritative.

  • Kind of like regular

  • regular accounting.

  • So, you need to know that.

  • If your materials for BEC, auditing, and regulation

  • are updated as of July 2015

  • you should be good to go.

  • Now, if your

  • if you have FAR materials,

  • you need to have the 2016 version,

  • either of your materials,

  • or

  • if you want some

  • amazing materials that

  • don't cost the price of a really nice cruise,

  • then you can get some NINJA materials.

  • There's free downloads on the site.

  • Some free demos as well.

  • All right.

  • End of that marketing message.

  • But many more marketing messages to come.

  • I promise.

  • Let's jump into your questions.

  • Okay, so backing up, I'm from Kansas.

  • I live out in the country and I'm not very cultured.

  • And so if you have a foreign sounding name,

  • chances are, more likely than not,

  • that I'm going to butcher it.

  • So I apologize in advance,

  • which is actually one of my pet peeves.

  • People who either apologize in advance

  • or thank someone in advance.

  • But anyway...

  • Like when someone says, "Hey, I need,

  • give me some advice, TIA, thanks in advance."

  • It's like one of my little pet peeves.

  • But I apologize in advance.

  • Rashit says,

  • "I intend to appear

  • for FAR, reg, and auditing

  • in the third quarter of 2016.

  • If I buy the NINJA books now, would they include

  • all of the relevant updates and amendments?"

  • The short answer is no, because there will be

  • some July updates, especially for regulation,

  • but the good news is that NINJA materials

  • come with free updates until you pass.

  • So you can buy it now or buy it later

  • if you're not going to

  • study until third quarter, you might as well wait.

  • Stella writes in,

  • "I have only one exam left, which is auditing.

  • I bought your multiple choice questions to practice.

  • My earliest credit that I will lose is FAR

  • and I will lose it February 24th 2016.

  • I plan to take my last exam on or before February 14th.

  • Would that be risky?

  • Please advise."