Globalization’s Impact On Cpa (Certified Public Accountant) Exam

In today’s modern society, global communication has become an asset readily available to many people due to the modern advancements in technology. In the business world, the convenience of increasing connectivity with other counties has created the concept of “globalization”. As a result, the international capital market has been changed dramatically. In order to ensure that accountants are able to provide accurate and appropriate financial information for economic entities, the structure and content of the uniform CPA Examination is continually changing according to the developments of the business environment.


Changes in the past

One of the biggest changes in the CPA exam history is in 2004, when the CBT (computer-based test) came into popular use in place of the traditional paper-based exam. At about the same time the forth section, business environment and concepts, and a new case study task called stimulations were added. The benefits of using CBT includes keeping the test questions current, providing more frequent and flexible test schedules, and reducing grading time. However, the CBT also requires candidates have research and analytical skills as well as the ability to use database software and certain IT knowledge. The change indicates that solely having technical skills are no longer acceptable for a proficient accountant. Additionally, analyzing the financial situation of an entity based on the current global economic market is the ability that a CPA should have.


Changes in the future

With the development of globalization, the requirements of the CPA are getting more and more specific. Instead of simply following the formula and doing the math, CPA candidates need to be aware of what role the entity is playing in the global market. Today, considering more and more companies and institutes have expanded to the other countries, CPAs need to be able to handle the change as well.

According to the “Content and Skill Specifications for the Uniform CPA Examination” that was published on May 15, 2009 by AICPA (the American Institute of Certified Public Accountants) , there will be a new version of the CPA exam to be implemented in 2011. In the specifications, one considerable change is that the Generally Accepted Accounting Principles (GAAP) will no longer be the only principle that CPAs must follow in the U.S. Comprehending the International Accounting Standards Board (IASB) will be a new requirement due to the effects of globalization on the U.S. economy. New concepts that the IASB brings are the International Auditing and Assurance Standards Board (IAASB), International Standards on Auditing (ISAs), the International Ethics Standards Board for Accountants (IESBA), the International Federation of Accountants (IFAC), and the International Financial Reporting Standards (IFRS). CPAs will be tested in both AUD (Auditing and Attestation) and FAR (Financial Accounting and Reporting) sections. CPA candidates will be asked to not only be familiar with those concepts, but also be able to compare the difference between International Financial Standards and related concepts in the U.S. The reason for CPAs to apply for the International Financial Standard in the U.S. is to build up a global scale for financial reports and make them consistent and comparable to not only the U.S. entities, but more importantly, the entities across the world.

 For the BEC (Business Environment and Concepts) section, the “specification” stated that candidates are required to “apply knowledge of changes in the global economic markets in identifying the impact on an entity in determining its business strategy and financial management policies, including managing the risks of: inflation, deflation, commodity costs, credit defaults, interest rate variations, currency fluctuation, and regulation.” In other words, the skills based on managerial accounting are being recognized and increasing in demand.

Different than the traditional accountants, CPAs of this generation will deal with both financial and non-financial data to help decision making of the entity. They are required to use their professional skills to analyze the data of the past, predict the data of the future, and compare that information with other entities in the same industry across the world. CPAs will be required to provide possible strategies in a managerial aspect.


As a result of the impact of globalization on the U.S. economy, there certainly will be more and more requirements on the CPA exam. The people who intend to take the CPA exam should start to build their knowledge, skills, and abilities on the international business environment in order to be more marketable in this increasingly competitive field.











Works Cited

Howard, Randy, Anjo, Kotaro, Gleim, Irvin N, “Global deman for the CPA exam”. The CPA Journal Dec 2001.

Pounder, Bruce. “How Globalization is Affecting U.S. Accountants”. Strategic Finance Jan. 1 2007: Vol. 88 Issue 7, p41-45, 5p

Shoaf, Victoria. “International financial reporting standards: Significance, acceptance, and new developments”. Review of Business Jan 1 2002.

The Board of Examiners American Institute of Certified Public Accountants, ” Content and Skill Specifications for the Uniform CPA Examination “. The Uniform CPA Examination. May 15 2009 <>



Yanlin Zhang

West Chester University

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