NASBA annual meeting: association calls for computerized uniform CPA exam.

It's time to bring the Uniform CPA Examination into the computer age, according to the state boards of accountancy. At the 87th annual meeting of the National Association of State Boards of Accountancy (NASBA) in Dallas, regulators from 44 state boards heard reports on what other professions, including nursing and architecture, already have done to strengthen their national examinations and learned wiry NASBA, in partnership with the American Institute of CPAs, supports a move to revamp the Uniform CPA Examination to improve its quality and node of delivery.

"There is no question that the CPA examination will be going to computer-based testing," outgoing NASBA president Noel P. Kirch told the approximately 200 attendees. "The only question is, When? We, the NASBA leadership, believe very strongly that the customers (the state boards) should be involved, directly or indirectly through NASBA, in the process of determining the future of the examination. I would challenge the AICPA to work with NASBA to devise a plan for the development, delivery and administration of a computer-based CPA examination."

Working with the AICPA

Kirch pointed to existing successful joint efforts between the Institute and NASBA, which have produced the Uniform Accountancy Act (UAA), the Model Rules under the UAA and the International Qualifications Appraisal Board. "Why can't something similar be done in connection with the future computer-based CPA examination?" he asked.

AICPA board chairman Robert L. Israeloff told the participants, "If computerization [of the exam] proves feasible and sensible, as I expect it will, its implementation will require a tremendous number of tasks that will be impossible to accomplish without cooperation between all parties having a stake in the CPA examination." He assured them that the NASBA and AICPA leadership would meet shortly and "agree on a structure satisfactory to all."

Computerized testing

In 1994, NASBA's CPA examination services division commissioned Knapp and Associates, of Princeton, New Jersey, to study the status of computerized testing in the professions. According to Joan Knapp, president of the organization, there are 857 computer-based testing centers in operation throughout the country. The National Council of State Boards of Nursing is using computerized testing for 240,000 candidates annually, and the American Production and Inventory Control Society, the American Society of Clinical Psychologists and the National Council of Architectural Registration Boards are well on their way to using computerized exams, she said. Other professions moving to computerization include podiatry, critical care nursing, pharmacy technicians, securities dealers and bar examiners, Knapp told the accounting regulators.

Computer-adapted testing cut the examination time for registered nurses from two days to a maximum of five hours, reported Billie Haynes, former executive director of the California Board of Vocational Nurse and Psychiatric Technician Examiners. That organization found that, next to a practical exam, computer-adaptive testing is the most precise way to test a candidate's knowledge, skills and abilities. However, Haynes cautioned, the accountancy boards need to have an examination that is psychometrically sound, legally defensible and verifiable. She added, "You must be forward-looking; you don't have a choice."

CPA examination review board (ERB) chairman Wilbert H. Schwotzer reported that the ERB again concluded the Uniform CPA Examination could be relied upon for licensing purposes by the state boards. However, he encouraged the boards to take a careful look at the ERB's annual report and its recommendations and urged them to become proactive in their comments to the AICPA examinations division.

Moving toward an improved CPA examination was one of the goals for the association identified by incoming NASBA chairman Welling W. Fruehauf. His other goals included working with the AICPA educational management exchange subcommittee and the continuing professional education standards subcommittee to promote uniformity in CPE through the adoption of common standards; implementing a strategic planning process for NASBA; working with federal agencies on enforcement; and improving service to and communication with the state boards. Fruehauf predicted additional regulation is coming. "Our job will continue to grow in added responsibility to the public," he said.

In conformity with the revisions to NASBA's bylaws adopted at the annual meeting, Fruehauf became NASBA's first volunteer leader to be named chairman; the association's chief executive officer, David A. Costello, assumed the title of president.

Nonlicensee ownership and tort reform issues being studied

For months, the boards have been weighing the pros and cons of nonlicensee ownership of CPA firms. Nathan T. Garrett, who heads a NASBA committee studying the issue, said his group will continue to gather the state boards' opinions, collect information from areas where nonlicensee ownership is permitted and provide forums for debate between supporters and opponents before making any recommendations to the NASBA board of directors.

The state boards also are discussing the various aspects of tort reform. G. W. Tonkin, chairman of NASBA's legal liability task force, said, "Two years ago, the CEOs of five of the largest CPA firms came before our annual meeting and presented their views on the circumstances of accountants' regal liability and their proposals for reform of the relevant statutes. They asked for NASBA's support of their coalition in achieving those reforms." Since then, the task force has distributed reports to the state boards to provoke interest, stimulate discussion and provide information on the issues involved. Tonkin said the task force planned to poll the boards in the next few months to gather their conclusions regarding these proposals.

Also at the annual meeting, the 1994 William H. Van Rensselaer Public Service Award was presented to Lorin H. Wilson, a NASBA past president (1966-67) and a former president of both the California and Washington state CPA societies. Wilson was president of the Association of CPA Examiners when it changed its name to NASBA. He is also a former member of the AICPA board of examiners and of the NASBA CPA examination review board.