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American Institute of Certified Public Accountants. Board of Examiners

Professional Examination Service. Department of Research and  Development

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eGrove (Univ. of Mississippi)

University of Mississippi eGrove Examinations and Study American Institute of Certified Public Accountants (AICPA) Historical Collection 5-1999 Critical Incident Interviews Report Professional Examination Service. Department of Research and Development American Institute of Certified Public Accountants. Board of Examiners Follow this and additional works at: https://egrove.olemiss.edu/aicpa_exam  Part of the Accounting Commons Critical Incident Interviews Report CPA General Business Knowledge StudyPrepared for American Institute of Certified Public Accountants Board of Examiners Content Oversight Task ForcePrepared by Professional Examination Service Department of Research and Development 475 Riverside Drive New York, NY 10115May 1999PurposeThis report summarizes the results of the critical incidents interviews as part of the General Business Knowledge (GBK) Study that Professional Examination Service (PES) is conducting for the American Institute of Certified Public Accountants (AICPA). The critical incidents interviews represented one of two data collection initiatives that PES implemented in the spring of 1999. The second initiative consisted of the conduct of two focus panels. The goal of both initiatives was to refine the draft delineation of the general business knowledge required by CPAs in practice that was developed by the GBK Working Group of the Content Oversight Task Force.ProceduresPotential interviewees were selected from a pool of nominees recruited through a nomination process implemented by a staff member of the Examination Division of the AICPA. Additional interviewees were selected from a pool of individuals who responded to an advertisement in the July/August 1998 CPA Newsletter.Fifteen individuals were interviewed. Interviewees were senior- and manager-level CPAs working at local, regional, and national firms who had responsibility for supervising and/or managing other CPAs. Participants represented diverse practice settings and locations. A list of the interview participants, and a summary description of their demographic and professional characteristics, are presented in Appendices 1 and 2 to this report. (Between 3 and 4 telephone calls were placed to additional 7 nominees; in most cases, PES received no “call backs” and was unable to schedule an interview.)The interviews were conducted during April 1999. Participants were contacted by telephone in advance of the actual interview. At that time, a convenient date and time for the interview was established. All interviews were conducted by telephone. The length of the interviews ranged from 30 to 70 minutes.The interview was designed to elicit a list of critical business related knowledge used by CPAs in practice. In advance of the interview, each participant was sent two documents to review: a listing of 18 categories of general business knowledge developed by the COTF, and a copy of the content outline for the Business Law and Professional Responsibilities section of the Uniform CPA Examination. A copy of the pre-interview mailing is presented in Appendix 3. A copy of the interview protocol is presented in Appendix 4.Each interview began with a brief introduction to General Business Knowledge Study and a description of the purpose of the interview. The interviewer then asked the following ten questions:• Briefly describe your major duties and responsibilities as a certified public accountant.• Attachment A lists areas of business/industry-related knowledge that might be used by CPAsPES Report to the AICPA 1 GBK Critical Incident Interviewsin public accounting. Of those knowledge areas listed on the sheet, which ones are the most important to the practice of public accounting?• In addition to those listed, what other types of business knowledge are important in public accounting?• Thinking of the CPAs you see or supervise who are engaged in the practice of public accounting, what gaps in their business knowledge have affected their work? In what way? It might be helpful to think of a time when you or a CPA you supervise did exceptionally poorly—wherein having some specific business knowledge or business perspective made the difference in the success or failure of the engagement.• Thinking of the CPAs you see or supervise, where is their business knowledge base strongest?• Attachment B contains the content specification outline for the Business Law and Professional Responsibilities portion of the Uniform CPA Examination. Knowledge of which of these items is necessary for the practice of public accounting? Would you add or delete any content?• On a somewhat different topic, what types of business knowledge (and/or business law) do you expect an entry level CPA that just passed the CPA exam to possess?• Describe the C.P.E. your firm offers related to business knowledge.• Tell me about the CPAs you supervise. What kind of work do they do? How experienced are they?• What types of business knowledge should be tested on the Uniform CPA Examination?Follow-up and results of the Critical Incident InterviewsIn preparation for the May 3, 1999 meeting of the AICPA Board of Examiners' COTF, PES prepared an annotated delineation of general business knowledge that incorporated the results of the critical incidents interviews and the focus panels. The annotated delineation, Revised Delineation of General Business Knowledge: Results of Critical Incidents Interviews and Focus Panels, was presented to the COTF for review on May 3, 1999.PES Report to the AICPA 2 GBK Critical Incident InterviewsAppendix 1 Roster of Critical Incident IntervieweesName Firm StateJulie Barrientos KPMG NEClay Benedict Rogoff Erickson Diamond & Walker, LLP NMJill Duncan Dixon Odom PLLC NCShelley Earsley Eide Bailly LLP NDMark Hobbs Hobbs and Corley SCLisa Johnson Kafoury, Armstrong & Co NVShari Johnson Arthur Andersen ILRandall Mason Hood & Strong, CPA's CAMindy Orth Olive, LLP INChristopher Pautler RBG&Co MOTodd Rakowski Kolb Lauwasser & Co WIHal Schultz PricewaterhouseCoopers LLP CAJohn Soehle Freedberg, Derba, & Tardift MAMichelle Streit McGladley & Pullen, LLP ILBret Von Urff BDO Seidman LLP PAUnable to Schedule:Caprice Atterbury Bautista Domachowski, Kempisty, & Salvatore NYCatherine Delesky PricewaterhouseCoopers LLP NJAndrew Franklin AMEX TBS MDMaryBeth Hicks PricewaterhouseCoopers LLP KYTal Kaissar Ernst & Young LLP NYKaryl Sadler Deloitte & Touche LLP ALJose Valiente Valiente, Hernandez & Co, PA FLPES Report to the AICPA GBK Critical Incident Interviews3Appendix 2Professional and Background Information of Critical Incident Interviewees (N=15)1. In what type of firm do you work?5523LocalRegionalNationalInternational (Big 5)2. What is the number of professional accountants that work for your firm, in total?0226512-1011 - 100101- 10001000+3. What is your present position in your firm?2634Partner or stockholder Manager or equivalent Supervisor or equivalent Senior or equivalent4. How many years of experience to you have in public accounting?07620 1-5 6-10 10+5. How many years of experience do you have in non-public accounting?105000 1-5 6-10 10+6. What is your highest level of education?123Bachelor’s degreeMaster’s degree7. What is your gender?78FemaleMalePES Report to the AICPA 4 GBK Critical Incident InterviewsAppendix 3To:Fax:From: Patricia M. MuenzenAssistant Director of Research ProgramsDate: April 6, 1999Re: Critical Incidents InterviewPages: 4, including this cover sheetAgain I would like to thank you for your participation in the Business Law and Business Knowledge Study sponsored by the American Institute of Certified Public Accountants (AICPA), and your willingness to complete a Critical Incidents Telephone Interview. To prepare, it might be useful to think about some of the questions that I will be asking:Of those areas of business/industry-related knowledge listed in Attachment A, which ones are the most important to the practice of public accounting?Thinking of the CPAs you see or supervise who are engaged in the practice of public accounting:Where is their business knowledge base strongest?What gaps in their business knowledge have affected their work? In what way?Think of a time when you (or a CPA you supervise) did exceptionally well or exceptionally poorly—wherein having some specific business knowledge or business perspective made the difference in the success or failure of the engagement. Describe the situation. What specific business knowledge made you (or the CPA you supervise) particularly effective (or ineffective) in this situation?Of the areas of business law listed in Attachment B, which ones are necessary for the practice of public accounting?I look forward to speaking with you n, 1999 at. If you need to reschedule your interview, please call me at (212) 367-4273.Enc.Attachment ACategories of Business KnowledgeEconomics Production Factors and Cost FunctionsGovernment Regulation of Business Cost MeasurementsBusiness Organizations PricingContracts Property LawAgencies Property InsuranceWorking Capital Policy and Management Long-term Financing and Capital StructureMarketable Securities Debtor-Creditor RelationshipsAccounts and Notes Receivable Budgeting and PlanningInventory Management Decision AnalysisAttachment BBusiness Law And Professional ResponsibilitiesI. Professional and legal responsibilitiesA. Code of professional conductB. Proficiency, independence, and due careC. Responsibilities in other professional servicesD. Disciplinary systems imposed by the profession and state regulatory bodiesE. Common law liability to clients and third partiesF. Federal statutory liabilityG. Privileged communications and confidentialityH. Responsibilities of CPAs in business and industry, and in the public sectorII. Business organizationsA. Agency1. Formation and termination2. Duties of agents and principals3. Liabilities and authority of agents and principalsB. Partnership, joint ventures, and other unincorporated associations1. Formation, operation, and termination2. Liabilities and authority of partners and ownersC. Corporations1. Formation and operation2. Stockholders, directors, and officers3. Financial structure, capital, and distributions4. Reorganization and dissolutionD. Estates and trusts1. Formation, operation, and termination2. Allocation between principal and income3. Fiduciary responsibilities4. DistributionsAttachment BHI. ContractsA. FormationB. PerformanceC. Third party assignmentsD. Discharge, breach, and remediesIV. Debtor-creditor relationshipsA. Rights, duties, and liabilities of debtors and creditorsB. Rights, duties, and liabilities of guarantorsC. BankruptcyV. Government regulation of businessA. Federal securities actsB. Employment regulationC. Environmental regulationVI. Uniform commercial codeA. Commercial paperB. SalesC. Secured transactionsD. Documents of titleVII. PropertyA. Real property including insuranceB. Personal property including bailments and computer technology rightsAppendix 4Interviewee’s Name:____________________________________ Date:CRITICAL INCIDENTS INTERVIEW for the General Business Knowledge StudyConducted for American Institute of Certified Public Accountants Harborside Financial Center 201 Plaza Three Jersey City, NJ 07311-3881Conducted by Professional Examination Service Departments of Research and Development 475 Riverside Drive New York, New York 10115CRITICAL INCIDENTS INTERVIEW PROTOCOLAICPA GENERAL BUSINESS KNOWLEDGE STUDYBefore we begin with questions and answers, I would like to give you some background on the study we are conducting for the AICPA, and our reasons for interviewing you at this time.The AICPA is committed to ensuring that the Uniform CPA Examination accurately reflects the knowledge base required of CPAs. A Content Oversight Task Force appointed by the AICPA identified general business knowledge and broad business perspectives as a knowledge base that is important to the successful performance of auditing, financial accounting and reporting, and taxation engagements.The AICPA contracted with us (PES) to gather more-specific information on how general business knowledge, and a broad business perspective, impact accounting practice. You were asked to participate in this interview because you are a CPA who can help us understand the essential business knowledge required of the CPA.The information that you provide in this interview is confidential, and will only be used in connection with the AICPA study. The call should take 30 - 45 minutes to complete. Do you have any questions before we move on?Briefly describe your major duties and responsibilities as a certified public accountant.Tell me about the CPAs you supervise. What kind of work do they do? How experienced are they?[Refer to stimulus material.] Attachment A lists areas of business/industry-related knowledge that might be used by CPAs in public accounting. Of those knowledge areas listed on the sheet, which ones are the most important to the practice of public accounting? [Probe to elaborate on the specific types of knowledge within the most-important areas.]In addition to those listed, what other types of business knowledge are important in public accounting?Thinking of the CPAs you see or supervise who are engaged in the practice of public accounting, what gaps in their business knowledge have affected their work? In what way? It might be helpful to think of a time when you or a CPA you supervise did exceptionally poorly—wherein having some specific business knowledge or business perspective made the difference in the success or failure of the engagement. [Have interviewee describe at least two types of critical incidents. Probe for the business knowledge that made them particularly ineffective in this situation.]Thinking of the CPAs you see or supervise, where is their business knowledge base strongest?[Refer to stimulus material.] Attachment B contains the content specification outline for the BL&PR portion of the UCPAE. Focusing on each of the seven areas, knowledge of which of these items is necessary for the practice of public accounting? Would you add or delete any content? [Probe for specifics within each area identified as important.]On a somewhat different topic, what types of business knowledge (and/or business law) do you expect an entry level CPA that just passed the CPA exam to possess?Describe the C.P.E. your firm offers related to business knowledge.[If time permits, ask, What types of business knowledge should be tested on the Uniform CPA Examination?]BACKGROUND INFORMATIONFinally, I'd like to ask you some questions about your background. We are collecting this information for research purposes only. We will not use it to identify you in connection with the information you provided during the interview.1. In what type of firm do you work?LocalRegionalNational/IntemationalOther2. What is the number of professional accountants that work for your firm, in total?3. What is the number of professional accountants that work at your branch/location?4. What is your present position in your firm?Sole practitionerPartner or stockholderManager or equivalentSupervisor or equivalentSenior or equivalentStaff accountantOther5. How many years of experience do you have in public accounting?6. How many years of experience do you have in non-public accounting?___7. What is your highest level of education?Some college/no degreeAssociate’s degreeBachelor’s degree in_______________________________Master’s degree in_________________________________Doctorate in_____________________________________  OtherThank you for participating in this interview. Your personal and professional contributions are very much appreciated by the AICPA.Interviewer note: What is interviewee’s gender? FemaleMale

Critical Incident Interviews Report

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