Gleim CPA Review Updates to AUD, BEC, FAR, and … · Page 2 of 28 Task-Based Simulations -- Toolbar Icons and Operations The following information and toolbar icons are located at

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Gleim CPA ReviewUpdates to AUD, BEC, FAR, and REG

2018 Edition, 1st PrintingMarch 2018

On April 1, 2018, the AICPA will update certain CPA exam design and function features. These changes will modernize the look of the interface and make the test-taking experience easier for candidates. The exam content itself will not change. Whether you are just beginning your CPA exam journey or have already sat for one or more parts of the current version of the exam, this update will help acclimate you to the new CPA exam interface.

Appendix – Optimizing Your Score on the Task-Based Simulations (TBSs) and Written Communications (WCs)

Each section of the CPA exam contains multiple testlets of Task-Based Simulations. The number of TBS testlets and the number of TBSs in each testlet are the same for each exam section except BEC.

Task-Based Simulations are constructive response questions with information presented either with the question or in separate exhibits. Question responses may be in the form of entering amounts into a spreadsheet, choosing the correct answer from a list in a pop-up box, completing accounting or tax forms, or reviewing and completing or correcting a draft of a document. In the AUD, FAR, and REG exam sections, you will also have to complete a Research task, which requires you to research the relevant authoritative literature and cite the appropriate guidance as indicated. You will not have to complete a Research task in BEC.

It is not productive to practice TBSs on paper. Instead, you should use your online Gleim CPA Review Course to complete truly interactive TBSs that emulate exactly how TBSs are tested on the CPA exam. As a CPA candidate, you must become an expert on how to approach TBSs, how to budget your time in the TBS testlets, and the different types of TBSs. This update covers all of these topics andincludes examples of the new interface for each type of TBS you may encounter. Use this update only as an introduction to TBSs, and then practice hundreds of exam-emulating TBSs in your Gleim CPA Review Course, which has been updated to emulate the new CPA exam interface.

Copyright © 2018 Gleim Publications, Inc. All rights reserved. Duplication prohibited. Reward for information exposing violators. Contact [email protected].

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Task-Based Simulations -- Toolbar Icons and Operations

The following information and toolbar icons are located at the top of the testlet screen of each TBS. All screenshots are taken from the AICPA Sample Test (www.aicpa.org). The examples that follow are taken from our online course. The CPA exam, the Sample Test, and all screenshots are Copyright 2018 by the AICPA with All Rights Reserved. The AICPA requires all candidates to review the Sample Tests and Tutorials before sitting for the CPA exam.

1. Exam Section and Testlet Number: The testlet number will always be 3, 4, or 5 for the simulations.

2. Time Remaining: This information box displays how much time you have remaining in the entire exam. Consistently check the amount of time remaining to stay on schedule.

3. Calculator: The calculator icon launches a basic tool for simple computations. It is similar to calculators used in common software programs. The calculator tape is saved and accessible throughout the entire testlet; it does not clear until a new testlet is entered or the “Clear Tape” function is employed. Numbers (but not text) can be copied and pasted between the calculator, any exhibits, the question content and answer fields, and Excel.

4. Excel: Instead of the proprietary spreadsheet used previously, candidates will now have access to the desktop version of Excel, which launches by clicking the spreadsheet icon found in the top toolbar.

• The exam spreadsheet will perform the same essential functions as a regular desktop Excel spreadsheet.

• Candidates can easily transfer data out of and into Excel, for example, by copying from Excel and pasting to the answer fields of a simulation or into the calculator, and vice versa. Excel will retain all of the information entered while in a testlet, even if Excel is closed and/or when navigating between simulations. Excel will only clear when beginning a new testlet. There is also an option to manually save any work.

• Work done and calculations performed within Excel will not be graded. Many of Excel’s less relevant features and some functions of Excel that may threaten user security will not work.


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5. Authoritative Literature: The Authoritative Literature for AUD, FAR, and REG is available in everyTBS testlet. You can use either the table of contents or the search function to locate the correct guidance. The table of contents will not populate until a source has been selected.

• An extremely useful new feature is that candidates can bookmark a document by clicking the bookmark icon next to the document title. All bookmarked documents will be listed in a new section that appears above the table of contents, and hovering over the bookmarked items reveals the full title in a pop-up box.

• The Advanced Search options have been altered to include the following:

▪ “All of these words:” multiple words at a time, in no particular order▪ “This exact phrase:” exact words in an exact order▪ “Any of these words:” one or more of the entered words in no particular order▪ “None of these words:” none of the words entered

• Clicking the “Search within:” box next to the search bar allows candidates to limit their search toa specific folder or sub-folder. Within the Advanced Search field, candidates must once againclick the “Search within:” box in order to limit their search to a designated sub-folder, even if the “Search within:” box is activated for the basic search.

• The search function of the Authoritative Literature tool can be used at a basic level to find wordsor numbers. A search can be enhanced with an asterisk, which searches for anything startingwith the word, or with a question mark in place of a character, which indicates that any character can appear in that specific position in the search term. Up to three question marks can be used.

6. Overview: The overview lets you review and navigate the questions within a testlet. You can also use it to view, add, and remove bookmarks.

7. Help: Help has been dramatically redesigned, and the Directions tab at the beginning of each testlet has been removed. The new Help icon is present in the top toolbar for the duration of the exam. This icon opens an extensive file that provides all of the most important information about exam navigation, question responses, and exam tools, which can be navigated either via the table of contents or using the search bar.

8. Submit Testlet: There are two options when you choose this icon from the toolbar.

• In any of the first four testlets, you will be asked to select either Return to Testlet or Submit Testlet. Return to Testlet allows you to review and change your answers in the current testlet.Submit Testlet takes you to the next testlet.

• In the final testlet, you will be asked to select either Return to Testlet or Quit Exam. Choose QuitExam if you wish to complete the exam. You will not be able to return to any testlet, and you will not receive credit for any unanswered questions. To prevent accidentally ending your exam, you will be asked to verify your selection, or you can choose Go Back. Upon verifying you wish to End Exam, you will be required to leave the test center with no re-admittance.


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Navigation between simulations within a testlet is done using the number and arrow buttons directlybeneath the toolbar or the arrow buttons at the bottom of the simulation. You can navigate between simulations within a testlet at any time before you submit the testlet.

Clicking on a number will take you to the corresponding simulation. Clicking on the bookmark icon beside the number on the left will flag the simulation to remind you to return to it before submitting the testlet.

Workspace: The old vertical and horizontal split screen functions in the TBSs have been replaced by a designated workspace where all of the exam tools and exhibits open.

You can have multiple exam tools and exhibits open simultaneously, and you are able to freely resize and move each window.


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Task-Based Simulation Answering Techniques

Do not be intimidated by TBSs. Just learn the material and practice answering the different question types. Knowing how to work through the simulations is nearly as important as knowing what they test.

You can maximize your score on the TBS testlets of each exam section by following these suggested steps for completing Task-Based Simulations.

A. Budget your time so you can finish before time expires.

1. Allot small segments of the total testing time to each specific task. We recommend you budget 18 minutes for each TBS.

2. Track your progress to ensure that you will have enough time to complete all the tasks.

3. Use our Time Allocation Table to determine the time at which you need to start and finish each TBS testlet.

B. Devote the first couple of minutes to scanning each TBS.

1. Spend no more than 2 minutes previewing the TBSs you received by clicking through the numbers beneath the toolbar at the top of the screen.

2. You will be familiar with the layout of the TBSs if you have been practicing with Gleim TBSs under exam conditions.

C. Answer all the tasks within the time limit for each testlet.

1. Read all of the exhibits (e.g., financial statements, memos, etc.) associated with the TBS youare working on before you attempt to answer the simulation.

a. We have included detailed directions on using exhibits as source documents in the next section on Document Review Simulations. Much of those instructions can also be usedwhen answering regular TBSs that contain exhibits.

2. Do not skip any of the questions within a TBS. Make an educated guess if you are unsure of the answer and set a reminder for yourself by clicking the bookmark icon beside the TBS number at the top left of the simulation. There is no penalty for incorrect answers, so do not move on without at least selecting your best guess.

D. Spend any remaining time wisely to maximize your points.

1. Ask yourself where you will earn the most points.

2. Move from task to task systematically, reviewing and completing each one. Focus specificallyon any TBS you flagged.

3. Move on to the next TBS within the testlet or to the next testlet at the end of 18 minutes.


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DOCUMENT REVIEW SIMULATIONS

Within the Task-Based Simulation testlets included in each CPA exam section, you may find a Document Review Simulation (DRS), which will be named Document Review. You are required to review various exhibits to determine the best phrasing of a particular document. The document will contain highlighted words, phrases, sentences, or paragraphs that may or may not be correct. You thenmust select answer choices that indicate which (if any) changes you believe should be made in the highlighted words, phrases, sentences, or paragraphs.

The DRSs always include the actual document you must review and correct and one or more exhibits. Exhibits vary from one DRS to the next because they contain the information to be used as sources for your conclusions. For example, these exhibits may be financial statements, emails, letters, invoices, memoranda, or minutes from meetings. You must read each DRS exhibit so that you are always aware of the resources available.

Answering Document Review Simulations

A. Familiarize yourself with every part of the DRS.

Review each exhibit so you know what information is available. If your subject-matter preparation has been thorough, you should be able to identify quickly the most relevant information in each part of the DRS.

B. Address every underlined portion of text in the DRS.

You must make an answer selection for every modifiable section of a DRS because each counts asa separate question. You will know an answer has been selected when you see that the white outline in the blue icon has changed to a white checkmark.

C. Read the underlined section and answer choices carefully and completely.

Each underlined portion of text may have five to seven answer choices that may include the options to revise the text, retain the original text, or delete the text. Verify that each word or amount is correct in your choice before making your final selection.

D. Clearly understand the information in the exhibits.

Quickly survey the various items; then analyze the most relevant facts specifically and refer to them to reduce the possible answer choices. Keep in mind that the relevant information may be presented or worded differently than the document you are revising.

E. Double-check that you have officially responded to each underlined portion of text.

If you have time, go through the entire DRS once more to confirm that every underlined section has a white checkmark next to it.


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WRITTEN COMMUNICATIONS (WCs)

Each written communication (in BEC only) contains a scenario that requires you to prepare a writtenmemo or business letter in response. You will be able to cut, copy, paste, undo, and redo by clicking on the appropriate icon on the toolbar, which will remain visible as you scroll through the response area.

Answering Written Communications

You can maximize your score on the written communications testlet by following these suggestedsteps for completing the WCs.

1. Budget your time so you can finish before time expires.

a. Commit small segments of the total testing time to responding to each WC scenario.

b. Monitor your time and track your progress so you have enough time to respond to all three scenarios.

c. Use our Time Allocation Table to learn more about how to manage your time during the WCs.

2. Preview the scenarios in the first 2 minutes.

a. Do not spend too much time scanning the scenarios you received.

b. If you have been studying with the Gleim Premium CPA Review System, then you will have used an exact emulation of the WCs on the CPA exam and be comfortable with the layout already.


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3. Allocate 60 minutes to respond to the scenarios in the WC testlet in the BEC exam.

a. Complete each response in no more than 20 minutes.

b. Do NOT try to guess which is the ungraded pretest scenario. Respond to each scenario as though it counts!

4. Now that you have spent most of your time responding to the scenarios, spend your remaining 15 minutes or so perfecting your responses for maximum points.

a. Edit your responses to ensure they meet the writing criteria of the AICPA and that you have effectively communicated your response.

b. Move from scenario to scenario systematically, reviewing and completing each one.

Grading Written Communications

Your score on the WCs will make up 15% of your total score. The other 85% of your total score will be the sum of your scores on the multiple-choice testlets at 50% and the TBS testlets at 35%.

In the WCs, you will be graded on both technical content and writing skills. The AICPA’s Sample Teststates that the “technical content will be evaluated for information that is helpful to the intended reader and clearly relevant to the issue.” It also states that writing skill scores will be based on three criteria from the AICPA: organization (structure, ordering of ideas, linking of ideas to one another), development (presentation of supporting evidence), and expression (use of standard business English).The AICPA advises that all responses “should provide the correct information in writing that is clear, complete, and professional. Only those writing samples that are generally responsive to the topic will begraded. If your response is off-topic, or offers advice that is clearly illegal, you will not receive any creditfor the response.”

Gleim has expanded the definitions of the AICPA’s three writing skills criteria below and on the next page. Note that the italics denote items taken from the AICPA; everything else is further clarification from Gleim.

Organization -- the document’s structure, ordering of ideas, and linking of one idea to another

• Overview/thesis statement: Inform the reader of the overall purpose of the document; i.e., name the subject about which you are attempting to provide information.

• Unified paragraphs (topic and supporting sentences): Make a statement; then use the remainder of the paragraph to back up that statement.

• Transitions and connectives: Words such as “because,” “although,” “however,” and “moreover” allow you to connect related topics or shift the reader’s attention to a new idea.

Development -- the document’s supporting evidence/information to clarify thoughts

• Details: Simply asserting a fact, such as that debt on the balance sheet increases risk, is insufficient. The writer must describe the cause-and-effect relationship underlying this fact.

• Definitions: Accounting and finance terms, such as solvency and liquidity, may not be understood by the reader. The writer should explain them.

• Examples: The description of unfamiliar terms can be enhanced by the use of examples, such as the use of an expert system in the practice of distance medicine.

• Rephrasing: Stating an idea twice with different wording can also help the reader understand.


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Expression -- the document’s use of conventional standards of business English

• Grammar (sentence construction, subject/verb agreement, pronouns, modifiers): Adherence tothe basic rules of English grammar is essential.

• Punctuation (final, comma): A period must be used to bring a complete sentence to a close. Commas should be used to separate items in lists as well as to separate clauses within a single sentence.

• Word usage (incorrect, imprecise language): Business readers expect writers to avoid ambiguity and to choose the right word for the situation; for example, not to use the word “bond” where “note” is meant.

• Capitalization: The first word of a sentence and all proper names must be capitalized. Concepts and measures, such as liquidity and earnings per share, are not normally capitalized.

• Spelling: Business readers have an expectation that writers have a grasp of standard spelling conventions.


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MANAGING TIME ON THE TBSs

Managing your time well during the CPA exam is critical to success, so you must develop and practice your time management plan before your test date. The only help you will receive during your actual CPA exam is a countdown of the hours and minutes remaining. When there are less than 2 minutes left in an exam section, the exam clock will begin to include the seconds and turn red, but you should be doing your final review by that point.

Each of the testlets on the exam is independent, and there are no time limits on individual testlets. Therefore, you must budget your time effectively to complete all five testlets in the allotted 4 hours.

The key to success is to become proficient in answering all types of questions in an average amountof time. When you follow our system, you’ll have 2-17 minutes of total extra time (depending on the section) that you will be able to allocate as needed.

Each exam will begin with three introductory screens that you must complete in 10 minutes. (Time spent in the introductory screens does not count against the 240 minutes you get for the exam itself.) Then you will have two MCQ testlets. Each testlet contains half the total number of MCQs for that section (36/testlet for AUD, 31/testlet for BEC, 33/testlet for FAR, and 38/testlet for REG). Based on the total time of the exam and the amount of time needed for the other testlets, you should average 1.25 minutes per MCQ.

The final three testlets in AUD, FAR, and REG will have eight TBSs each: two in Testlet #3, three in Testlet #4, and three in Testlet #5. BEC will have four TBSs in two testlets, then a final testlet of three Written Communications (WCs). We suggest you allocate approximately 18 minutes to answering each TBS. On BEC, budget 25 minutes for each of the three WCs (20 minutes to answer, 5 minutes to review and perfect your response).**

To make the most of your testing time during the CPA exam, you will need to develop a time management system and commit to spending a designated amount of time on each question. To assist you, please refer to the Gleim Time Management System.

The table below shows how many minutes you should expect to spend on each testlet for each section. Remember, you cannot begin a new testlet until you have submitted a current testlet, and onceyou have submitted a testlet, you can no longer go back to it.

**BEC candidates may prefer to allocate more time to the TBSs and reduce the 17 minutes of extra review time after the WCs. In this case, we suggest 20 minutes per TBS, for a total time of 40 minutes in Testlet 3 and 40 minutes in Testlet 4, leaving 9 minutes of final review after the WCs.


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The exam screen will show hours:minutes remaining. Focus on how much time you have, NOT the time on your watch. Using the times on the previous page, you would start each testlet with the following hours:minutes displayed on-screen:

Next, develop a shorthand for hours:minutes. This makes it easier to write down the times on the noteboard you will receive at the exam center.

The following pages of this update contain five example TBSs. We have included a variety of TBSs, along with suggestions on how to approach each type. The answer key and our unique answer explanations for each TBS appear at the end of the update.

Again, do not substitute answering TBSs in your Gleim CPA Review Course with answering the TBSs presented here. Refer to these TBSs only for guidance on how to answer this difficult element of the exam. It is vital that you practice answering TBSs in the digital environment of our online course so that you are comfortable with such an environment during your CPA exam.

**BEC candidates may prefer to allocate more time to the TBSs and reduce the 17 minutes of extra review time after the WCs. In this case, we suggest 20 minutes per TBS, for a total time of 40 minutes in Testlet 3 and 40 minutes in Testlet 4, leaving 9 minutes of final review after the WCs.


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RESEARCH


This type of TBS requires that you research within the Authoritative Literature, which is accessible at the top of the TBS toolbar, to find the best supporting guidance for the presented scenario. Although there is only one question to answer in the Research TBS, it counts as much as a TBS with multiple questions, so you must treat it with the same gravity as any other TBS. Our suggested steps on how to answer this task type follow:

1. Read through the given scenario to identify the question being asked and, within that, the key terms to search for in the literature. In the example on the next page, the question isasking for how to apply presumptively mandatory requirements in an audit, so the key terms are presumptively, mandatory, and requirement.

2. Select the source(s) relevant to the question being asked; then click “View.” For this question, we want to look within the AICPA Professional Standards.

3. Type the key term(s) into the search box and click the magnifying glass.

4. Review the first 10 results. Use your knowledge of the topic to decide whether the search results fit the question you are researching. Often, the first search will not yield the correct answer, and it is necessary to narrow your scope.

5. Restrict your search to only the most relevant section of the literature by using the “Search within” function. To do so, choose the section of the literature from the table of contents that is most likely to contain the related literature. Click on that section, type your term into the search box, select the “Search within” checkbox, and click the magnifying glass. This will populate the results with only matches from that specific section.

6. From these streamlined results, select the exact paragraph that corresponds to the given scenario and enter your response using the on-screen formatting prompts.

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The following are the titles for your reference:

AU-C: Statements on Auditing Standards (Clarified)

CS: Statements on Standards for Consulting Services

PCAOB: Public Company Accounting Oversight Board

QC: Statements on Quality Control Standards

AT-C: Statements on Standards for Attestation Engagements (Clarified)

PR: Standards for Performing and Reporting onPeer Reviews

AR-C: Statements on Standards for Accounting and Review Services (Clarified)

PFP: Statements on Responsibilities in Personal Financial Planning

ET: AICPA Code of Professional Conduct TS: Statements on Standards for Tax Services

BL: Bylaws CPE: Continuing Professional Education

VS: Statements on Standards for Valuation Services


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NUMERIC ENTRY


This type of TBS requires that you calculate and then respond with some kind of number, e.g., an amount of currency, a ratio, etc. After clicking a cell, a field will appear. As you type, your automatically formatted response will appear in the shaded field below.

Be sure to review the formatted response before finalizing your answer by clicking Accept.

To reset the value of the cell, click Reset and click again when the button changes to Confirm.

Click Cancel at any time to discard any changes made to the cell.

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NUMERIC ENTRY: EXHIBITS


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OPTION LIST


This type of TBS is, in essence, a series of multiple-choice questions. This type of task requires thatyou select a response from a list of choices (which is provided beneath the task for this example). Some Option List TBSs may also have Numeric Entry type responses required.

To select an answer from a list of options, click a cell. Only cells that display a list icon require an answer.

When you click a cell, a list of answer options will appear. Select your response by clicking the radiobutton or the text of the response, and finalize your answer by clicking Accept.

To reset a cell back to blank, click Reset and click again when the button changes to Confirm Reset.

Click Cancel at any time to discard any changes to the cell.

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JOURNAL ENTRY


This TBS is a combination of both Numeric Entry and Option List questions being asked in the same TBS. (The options for the Option List questions in the following TBS are provided on the next page.)

In journal entries such as the one below, each entry will additionally have a “No Entry Required” checkbox in the upper left corner. If no entry is required for a given question, click the box and the cells will be grayed out.

The TBS below is also an example of a Global Response Grid simulation. Each distinct question within this type of TBS will have its own response cells, frequently with different answer choices.

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DOCUMENT REVIEW SIMULATION (DRS)


This type of TBS requires that you analyze certain words or phrases in a document to decide whether to (1) keep the current text, (2) replace the current text with different text, or (3) delete the text. You must review various exhibits (e.g., financial statements, emails, invoices, etc.) presented with the original document in order to find the information necessary for each response.

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DOCUMENT REVIEW SIMULATION (DRS): EXHIBITS


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ANSWER EXPLANATIONS

1. RESEARCH

2. NUMERIC ENTRY

3. OPTION LIST


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4. JOURNAL ENTRY

5. DOCUMENT REVIEW SIMULATION (DRS)


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Documents

Gleim CPA Review Updates to AUD, BEC, FAR, and … · Page 2 of 28 Task-Based Simulations -- Toolbar Icons and Operations The following information and toolbar icons are located at