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AICPA study of public practice.

The American Institute of CPAs board of examiners recently completed an analysis of public accounting practice to ensure questions on the Uniform CPA Examination continue to be practice related. The 1991 practice analysis identifies the major tasks and activities CPAs perform and also describes the knowledge and skills CPAs need to perform accounting and auditing (A&A) and tax engagements.

The data were culled from panel discussions with CPAs, survey responses from almost 2,000 AICPA members in public practice, interviews with recently licensed CPAs and CPAs' work diaries.

Here are some important facts about CPAs in public practice found in the study:

* They devote about 45% of their time to A&A, 38% to tax, 5% to consulting and 1% to personal financial planning.

* Of CPAs who spend at least 10% of their time doing A&A work, those with five or fewer years' experience devote almost half their A&A time to audit engagements. About 60% of that A&A time is spent obtaining, documenting and evaluating information. Those with over five years' experience devote about a third of their A&A time to audits and almost as much to compilations; however, they spend only half their A&A time obtaining, documenting and evaluating information. In contrast, the more experienced CPAs spend 22% of their A&A time in activities related to engagement reviews and communicating results to clients, while the less experienced CPAs devote only about 13% of their A&A time to such activities.

* Less experienced CPAs spend 25% more time on A&A work than do more experienced CPAs.

* About 10% of CPAs' time is spent on government and not-for-profit A&A engagements.

* Of the time spent on tax engagements, about 70% is on compliance work, 25% on consultation and planning work and 5% on representation work.

* The amount of time devoted to all tax engagements is unrelated to experience. However, CPAs with over five years' experience spend 65% more of their tax time on consultation-planning and representation work than less experienced CPAs, who spend 80% of their tax time on compliance work.

* CPAs believe many specific skills--such as analyzing, evaluating, documenting, organizing and writing--as well as techical knowledge are important to their competence. Overall, CPAs believe skills are more important than technical knowledge.

* Respondents believe knowledge of some related disciplines, such as business law, economics, marketing and financial markets and institutions, is relatively unimportant to their competence.

A task force is now using the 1991 practice analysis results to decide if changes are needed in the CPA exam content. The results also will be used to decide the best ways to assess the important skills identified by the practice analysis.

Copies of the report, Practice Analysis of Certified Public Accountants in Public Practice, may be obtained from the AICPA order department for $37.50; $30 for AICPA members (product no. 079300).

DAVID B. PEARSON, CPA, PhD, is a partner of Ernst & Young, Cleveland, Ohio. BRUCE H. BISKIN, PhD, is senior psychometrician of the AICPA examinations division.
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Title Annotation:Accounting Education
Author:Biskin, Bruce H.
Publication:Journal of Accountancy
Date:Oct 1, 1991
Words:502
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