Three years ago, I penned an article for the Pennsylvania CPA Journal titled, "Are We Failing the Exam?" At the time, many CPAs across Pennsylvania were concerned that recent accounting graduates were not taking the CPA Exam (the exam). The article included some suggestions that directed firms toward taking a more focused approach to motivate and reward their staff to sit for and pass the exam. In this follow-up article, I will examine what our firm did to motivate staff to pass the exam, and check in with our most recent successful candidates for their opinions.
Over the past three years, participation in the exam has increased as both firms and candidates became more familiar with a revised process. Since 2004, when the number of candidates dropped to below 50,000, the number of candidates has been steadily rising 10 percent each year, to just over 85,000 in 2008. This escalation is a positive trend, and it is necessary to sustain the profession.
At our firm, Reinsel Kuntz Lesher LLP (RKL), we implemented a number of incentives and removed several barriers for those who wish to become certified. While these incentives initially increased our costs, we reaped the benefit of having much greater success with staff passing the exam.
Lay the Groundwork
When new staff members begin employment, we provide them with a copy of PICPA’s booklet, CPA Exam in Pennsylvania - Get the Facts You Need to Pass, and explain that we expect them to sit for, and pass, the exam as soon as it is practical. The booklet is a great resource for candidates, and it answers many questions they may have about when and where they can take the exam.
We then periodically check in with the CPA candidates to see when they expect to take the exam. We also track each employee’s progress toward completion of the test’s four parts. Monitoring progress is important to keep the candidate on track. PICPA has an excellent spreadsheet available that can be used as a tool to help with this.
Once a year, we invite representatives from a CPA Exam review course provider into our offices to meet with CPA candidates and discuss the exam format. This has been well-received by our staff and has proven very valuable in helping them plan their approach toward passing. The representatives take the mystery out of the exam and prepare our staff on the timing that is involved from start to finish. Many do not realize that it can take six to eight weeks for a first-time application to be approved. Once the presentation is over, they realize they need to think ahead, even if they have not yet started to study.
CPA review courses are costly, which is a deterrent for many young people. We agree to pay 100 percent of the cost of review courses up front to remove this barrier. Our financial support, which amounts to between $1,800 and $2,825 per course, does come with the expressed expectation that the staff will sit for the exam within one year.
Our financial support does not end there, though. The exam is much more expensive to sit for than it was "back in the day," so our firm has made the commitment to fund the fees - one time for each part - and the registration each time. Section fees range from $179 to $226, and the registration fee (each time) is $95. This is another financial barrier that we thought needed to be removed.
We also think it is important to provide additional financial incentive. Our employees receive a $500 bonus when they pass the exam. Some firms I have spoken with pay successful candidates a bonus of as much as $5,000, while others offer a bonus, but on a declining scale - the quicker you pass, the greater the reward. Finally, some offer a pool of money that can be spent on review courses and registration fees, with any remaining amount paid to the employee.
In the past, we required staff to take vacation or PTO to sit for the exam. I don’t know about you, but taking the CPA Exam was not exactly what I considered a dream vacation. Now, we give candidates up to five days off with pay to study for, or take, the exam. Once again, the idea here is to remove a barrier.
The achievement of passing the exam is a big deal, and it is important to recognize. Passing is a significant milestone in the career of an accountant, so our firm sends a companywide e-mail announcing the event, and we celebrate with cake for everyone in the office. The gesture reinforces among co-workers the significance of passing the exam and, as for the celebration, who doesn’t like cake? Getting everyone together is a nice way to personally congratulate the candidate, and it enables the managing partner or CEO to say a few words as well.
...And the Stick
Our firm’s tone with regard to the CPA Exam has changed as well. We increased our emphasis on passing the exam sooner rather than later, beginning with discussion during the interview process and continuing through the performance review process. Those of us from the old school just knew our superiors expected us to pass the exam, but we have learned with our newer staff that it is important to verbalize its importance from the start.
During the interview process, new employee orientation, and our annual reviews, we remind candidates that there is an expectation that they sit for, and pass, the exam, and that passing will only get harder the longer they wait. We stress that they need to have specific goals to sit for, and pass, the exam over a defined period of time.
Encouraging a feeling of camaraderie has done wonders for achieving successful completion of the exam. And the peer pressure that goes with it is a wonderful thing. When many of us were young, during the first weeks of May and November at a public accounting firm, we were expected to be with our peers, sitting for the CPA Exam. It was simple. These days, peer influence is more subtle. Staff members now talk about where they stand with the exam, and those who have passed provide words of wisdom to those who have not.
It is important to tie advancement within the firm to passing the exam. In our firm, the level of supervisor is the cut-off, and that includes candidates in the audit department, small business, and tax. Other firms I have spoken with require senior-level employees to have passed the exam.
But Does It Work?
Although we feel our program is working, we also surveyed 20 of our recent successful candidates to get their perspective on the actions we’ve instituted. We asked them the following six questions. I summarized the results and included some of my favorite answers with several of the questions.
1. From the time you started studying for the CPA Exam until the time you passed, how long did it take?
The average time to pass all four parts was 18 months. Times ranged from seven months to five years. Eighteen months was also the most frequent answer.
2. What study aids did you use, if any?
Most used a CPA Exam review course - some via live classroom, but the majority through CD-Rom and written materials. The candidates must determine which method of learning is most effective for them - live, written, or via CD.
3. If you used study aids, did we pay for them?
Some candidates had started at other firms, who had paid for the courses, and a few had begun to study before we changed our policy to pay for 100 percent of the review courses. For the most part, candidates felt that the review materials were very helpful, and several mentioned that they may not have been able to afford them on their own.
4. What, if any, obstacles did you face in trying to pass the CPA Exam?
Time and motivation were the two big obstacles mentioned frequently by our staff. I was glad to see that no one mentioned a financial barrier, since we worked very hard to eliminate those.
· "Time was an issue, especially starting out in a new job fresh out of college (at a firm where, at the time, few if any people were studying for or taking the exam). I found that it was easier for me to make time to study when I switched to RKL, which is much closer to my home. I do think there are disadvantages to waiting. With more experience comes more responsibility at work; studying had to be the second priority to my work. If I had work to take home with me at night, studying had to wait until the job was done."
· "Time was not a problem, as I studied and sat for the parts during the fall and summer. Cost was not either, as RKL covered everything. Motivation was the toughest challenge, especially during the summer with the nice weather. Fortunately, being only a year removed from college, I still had my study and cramming skills."
· "Personal motivation to study and finding time to focus. I would recommend that all college-grad associates complete the exam before they reach senior level, as time only becomes more scarce."
· "Finding a balance between work, studying, and trying to find time for leisure."
5. Knowing what you know now, is there anything you would have done differently to help you pass more easily or sooner?
· "I think it is best to start the exam as soon as possible. My workload at RKL only grew, and it was nice to get the exam out of the way as soon as possible."
· "I would have started my initial application earlier so that I could get it in, approved, and have my first Notice to Schedule (NTS) sooner. It took a while for my application to go through and to get my NTS. After the first one, though, it was a pretty smooth process."
· "During the first round, I would have made sure to read all of the homework readings, do all the practice simulations, and give myself more time for final review (all of which I did my second round)."
· "I would have taken it more seriously as soon as I was done college."
· "When I started taking the CPA Exam, you had to pass two parts to get any credit at all. The first time that I took the exam, I had studied for all four parts. I definitely would not do that again. Once I was able to take my remaining parts on the computer, I passed quickly. It would be nice to say that I would have spent more time studying, but I don’t regret any of the time that I spent with my family."
· "Maybe start it at a time when I didn’t have tax season twice during the 18-month allowed period."
· "I strongly suggest taking a day off before the exam to review, or taking it on a Monday. Ignore all other distractions for the day or two immediately before the exam; they will still be there after you leave the testing center."
· "Not going to a happy hour the night before an exam!"
6. What was your personal motivation for passing the CPA Exam?
· "I wanted to get my CPA license so that I would have those credentials and be more valuable to the firm."
· "To better my career opportunities." (Several of our staff made this comment.)
· "It just seemed logical. In a career in accounting, it is expected that you will pass the exam. It just made more sense to take it than to put it off."
· "I knew if I was going to try and improve on my career as an accountant, I would need to get my CPA license."
· "My motivation was a combination of personal and professional goals. I made it a personal goal to take this exam and pass it, and once I came to RKL I decided I wanted to do this right after my first busy season. I did just that, and I am very happy to have accomplished my personal goal. Professionally, the CPA designation is a priority, and it is a very important goal of mine to be promoted through the firm. I am at the point in my career where I need my CPA license to be promoted to the supervisor level."
· "Combination of expertise for a better/quicker chance to move up, good performance reviews, and embarrassment if I didn’t pass."
In the final analysis, it seems evident that if we remove barriers, provide rewards and recognition, and consistently stress the importance of passing the CPA Exam, we will have a profession full of successful candidates. This is good for my firm, good for your firm, and good for the public interest that we CPAs serve.
About the author:
J. Andrew Weidman, CPA, is CEO of Reinsel Kuntz Lesher LLP in Wyomissing, and a past-president of PICPA. He can be reached at firstname.lastname@example.org. Reprinted with permission from the Pennsylvania Institute of CPAs.