Test Question: Does CPA Exam Cost Too Much?

Is the $1,279 cost to take the CPA exam in New York too high?

Some members of the New York State Board for Public Accountancy are looking at ways to lower the cost.

CPA candidates across the nation will be charged approximately $930 to take the Uniform CPA Examination in 2009, not including a state board administrative fee that varies from state to state. The cost is higher in New York than any other state because state law requires candidates to pay for their licensure fees for their first triennial registration up front, bringing the total cost to sit for the exam to about $1,279 in New York. In almost all other states, candidates pay licensure fees after examination.

The cost of examination has nearly doubled from five years ago, and the rapid fee increases have led some accounting regulators to question why exam administration lies with a national professional association instead of with the regulators themselves. Now the regulators are trying to do something about it.

The State Board voted at its Nov. 19 meeting to recommend that the National Association of State Boards of Accountancy (NASBA) take responsibility for form and content of the exam, functions currently managed by the AICPA Board of Examiners (BOE).

The AICPA incurred high costs during development of the computer-based test and the addition of simulations to assess candidates’ skills.

Total exam fees have risen 97 percent since 2004, the first year the computer-based test (CBT) was offered.

The 14-year exam contract agreement between the AICPA, NASBA and Prometric, a testing service, expires in 2014. The contract requires that the AICPA break even by the end of the term, amortizing the $40 million in exam-related costs outstanding at the end of its fiscal year ending July 31, 2008, according to Craig Mills, the AICPA’s executive director of examinations.

That puts upward pressure on exam fees, but a contract extension could help alleviate the pressure, according to Mills, who believes the AICPA should continue in its current role under the new contract.

State Board Chair John C. Olsen commented on the rapid increases in AICPA’s fees over the years and said he believes NASBA could be more efficient at controlling costs than the AICPA.

“I would say NASBA could be more efficient, and I think NASBA will also have the benefit of hindsight, looking back at what has happened in the last five years [since the exam was computerized],” Olsen said after the meeting. “It seems natural [the exam] should be controlled by a national association of those [state] boards, rather than a private membership organization.”

Olsen suggested a regulator could be better suited to exam oversight. The AICPA’s priorities include “keeping members happy,” Olsen said, while “NASBA has a focus more in line with state boards of accountancy—to protect the public and regulate the profession. AICPA is interested in those things too, but has other priorities as well.”

Check out the Feb. 1 issue of the Trusted Professional for the full story.