[GWS CPA]

This is a new skill level that candidates will be utilized in the new version of the CPA exam.

It is the next skill level above Application.

AUD: 15%-25%
BEC: 20%-30%
FAR: 25%-35%
REG: 25%-35%

OBSERVATIONS and INSIGHTS

BEC and FAR have higher percentages of Analysis than Remembering and Understanding (R&U). BEC has 15%-25% R&U and 20%-30% Analysis while FAR has 10%-20% R&U and 25%-35% Analysis. FAR and REG each have the highest percentages of all the sections (25%-35%) because they have calculations on the most amount of questions and simulations.

Analysis is the examination and study of the interrelationships of separate areas in order to identify causes and find evidence to support inferences.

Analysis appears only in TBSs, especially Enhanced TBSs and Document Review Simulations (DRSs). This skill level does not appear in MCQs and BEC’s WCs.

The common tasks in each section that most candidates will see are:

AUD: detecting causes for financial misstatements (like inventory is overstated or liabilities are understated, and the root causes for each of them); finding and investigating any discrepancies and suspicions in ratios and analytics from analytical procedures to find causes for these discrepancies and suspicions (like frauds or errors, or weaknesses in internal controls); reviewing findings from supporting documentations to confirm that the account balances in question (in doubt) are materially correct (invoices, receipts, bank confirmations, communications from management, etc.); assessing risks of material misstatements from tests of internal control

BEC: comparing different projects to see which gives the most optimal effects on business finances (maximizing return on investment or economic value added); inspecting budget variances to find causes for these variances; differential analysis (like make or buy, or keep or disinvest a segment); examining risks (business, market, interest rate, foreign currency, liquidity, etc.) to investigate economic causes for these risks (like wages and salaries decrease due to economic recession in a business cycle) and the impact on businesses

FAR: correcting errors and what are the effects of correcting (especially ratios and EPS), including changing from non-GAAP to GAAP; reconciling cash and other accounts; changing from one principle to another (like from FIFO to LIFO) and the financial statement effects on them; determining proper treatments of any accounts from supporting documentations [leases (operating or capital), investments (available-for-sale or equity); inventory (FIFO or LIFO); bonds; stocks (including treasury stock), invoices from purchases; receipts from sales; etc.]

REG: using tax planning, strategies, and alternatives to minimize tax liability for individuals and businesses; determining proper tax treatments of incomes, deductions, credits, AMTs, gains, losses, property transactions, and other tax effects from supporting documentations

TIPS

Analysis is the new skill level that candidates have to utilize in the new version, so they have to practice on simulations (especially DRSs and Enhanced TBSs that have a lot of resources and exhibits on separate tabs). Even though candidates do many (and many) MCQs, doing a lot of them may not enough to conquer (and pass) the new version of the CPA exam because analysis appears only in simulations and simulations are worth 50% of the final grade. So, candidates have to do simulations more often and in greater numbers than ever before to ensure that they effectively utilize the analysis skill level and to pass the new version of the CPA exam.

Analysis can be utilized after candidates have learned R&U and applied the concepts.
For AUD, Analysis has to be used in order to utilize Evaluation of Bloom’s Taxonomy.

Good Luck for the CPA candidates taking the new version soon.