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Mr. Miyagi Can Help You Master the Exam

Pat-Morita_(Karate_Kid)In the iconic 1984 film The Karate Kid, Daniel, the young protégé of Mr. Miyagi, can’t understand why he’s being told to do basic tasks such as paint the fence, sand the floor, or polish the car with “wax on, wax off.” Daniel thinks he should focus on karate moves. While he pushes through and does what Mr. Miyagi tells him, Daniel eventually realizes the value and relevance of these tasks when he begins to spar. Each task in its own way serves as the basis for developing Daniel’s martial arts skills and ultimately prepare him to win the tournament against the Cobra Kai.

While we’ll never know if Daniel subsequently dropped his martial arts training to pursue a career as a CPA, one thing is certain – Mr. Miyagi taught the essential lesson that learning the basics and understanding foundational concepts is the key to success.

CPA candidates can learn a thing or two from Mr. Miyagi’s teachings when it comes to understanding the importance of the content covered in the Business Environment and Concepts (BEC) section, and how to manage it when sitting for the Exam. Since the introduction of BEC, the section has long been a mix of essential general business information, including corporate governance, economics, information technology, and financial and operations management, which provides a foundation for the other sections of Audit and Attestation (AUD), Financial Accounting and Reporting (FAR) and Regulation (REG). As a component of the Exam, the section reinforces the value of core business knowledge that a CPA must bring to the table when providing audit, accounting and tax services.

For instance, a newly licensed CPA needs to know basic economic concepts to effectively conduct an audit. An understanding of corporate governance will aid in determining how to conduct the audit and where to focus their attention when faced with an entity that demonstrates a weakness in this area. This general business knowledge strengthens the CPA’s ability to perform the work, ask the right questions, and know the appropriate steps to protect the public interest.

As announced earlier this year, the BEC section, like AUD, FAR and REG, will undergo substantive changes beginning April 1, 2017, to maintain its alignment with professional practice. This includes the introduction of task-based simulations (TBSs) that will be used in the BEC section for the very first time, and will require that the section’s testing time be increased to four hours. The simulations are a highly effective way to assess higher-order skills. While today’s Exam sections assess critical thinking, problem solving and analytical ability to a certain extent, the marriage of content and skills, as outlined in new, in-depth Exam blueprints, will drive how content is tested starting April 2017.

During its comprehensive practice analysis, the AICPA and its Board of Examiners identified the need to test higher order skills beyond basic content knowledge. In the next Exam, there will be greater content integration among the four sections. Candidates who are given application-, analysis- and/or evaluation-level tasks may experience content from other sections that would occur naturally in the task from a contextual perspective. While the tasks will always be rooted in a primary area of content knowledge and skills, they could draw upon a candidate’s basic knowledge, such as general business concepts as covered in the BEC section.

With a thorough understanding of these foundational concepts, and the ability to demonstrate that knowledge, just like Daniel in the Karate Kid, any CPA can succeed. Mr. Miyagi was right when he told Daniel, “You trust the quality of what you know, not quantity.” When it comes to taking the Exam and ultimately being an effective CPA, BEC content as presented in the blueprints, and how thoroughly you know it, is essential and important.

David Doroski, CPA, Sr. Technical Manager, BEC Section, American Institute of CPAs. 

Mr. Miyagi courtesy of Wikipedia.

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