 Hello, and welcome to the session in which I will discuss CPA exam changes that's taking place for the auditing and attestation section for the exam starting July 1st, 2021. I already covered FAR in a separate recording and I covered RAG, and what you should do if you're looking for FAR or RAG, please look in the description of this video and you will find them. So this is for other things. So I broke the changes for each topic separately. So this way you will focus on one exam at a time. What's relevant for you? Now, before I start, if you are a CPA candidate and most likely you are a CPA candidate, if you're looking at this recording, please check out my website, farhatlectures.com. You will find additional resources to study for your CPA exam. No, I don't replace your CPA review course. If you have a CPA review course, by all means, keep it. I don't replace it. I would love if I can replace it. I can't replace it for you. I cannot replace your Becker, Roger, Glyme, Wiley, or any other course. But here's what I can offer you. I can be a useful addition, an excellent supplement that will add 10 to 15 points to your CPA exam score. Here's my offer to you. Are you willing to risk $30 to try to find out whether my system works with you or not? You're risking $30. That's your loss. Your potential gain is pass in the exam. And I organize my material to match that of your review course. So it's easy for you to follow. Also, you can check out my website for additional resources like multiple choice through false exercises. But if not for anything, to check out how well is your university doing on the CPA exam to find out how good is your accounting program. I do have resources for other accounting courses as well. Please connect with me on LinkedIn and only then you can see actual students recommendation who used my system and passed the exam. Please like this recording, share it, connect with me on Instagram and Facebook. So first, we're going to be looking at the downgraded item from analysis to application. Simply put, there are certain topics that used to be tested on an analysis basis or analysis skill level. Now it's downgraded to application. As a CPA candidate, that's better for you. It means you don't have to know the information in the tails as much in the tails as possible. And if they gave you a simulation, it's relatively easier than if it's on the analysis level. And those topics are developing a detailed engagement plan. Now many students were asking me, what do you mean by downgraded? So I'm going to show you what do I mean by downgraded specifically. So this is the developing a detailed engagement plan under the 2019 blueprint, which is the previous blueprint and it looks something like this. This is what you needed to know. Maybe you can read it, maybe not, but you could download the blueprint and read them. You know, prepare a detailed engagement plan for an audit or non audit engagement. Again, prepare a detailed engagement plan for an engagement starting with the prior year engagement. So notice they kind of change it a little bit. Prepare supporting planning related material, prepare planning related material, same thing. So notice here, now what happened is this section here developing or modify the detailed engagement, you don't have to worry about this anymore. It's gone. So this is what I mean. It was downgraded from analysis to application. So you don't have to worry about this analysis part. Now the developing a detailed plan, it's only under application, which is good for you as a candidate. Now, other topics like related parties, same thing, it was downgraded from analysis to application. Now, each topic would have maybe several tasks, maybe some tasks were were downgraded, others are not. So you could look at the blueprint, but generally speaking, now they're more likely to give you application type of questions about related parties or the majority of them will be application related as well as litigation. Now, let's take a look at the topics that were downgraded from application to remembering and understanding. And this is really what you want, right? Remembering and understanding, going concern. Remember, you have used to have to worry about the going concern for foreign. We talked about this. You don't have to worry about far anymore. Preconditioned for an engagement. Again, it's remembering and understanding, subsequently discovered facts, routine representation, preparation of compliance report. I would say these all these topics, who deals with all these topics partners and most likely that's why they downgraded these topics. But again, that's a guess from my, from my end, because there are many topics that also partners deal with, but you still have to know content to be removed, not much for BEC. Actually, if anything, we're going to have, we're going to be expanding on auditing, not BEC on auditing. And here are the three topics that we're going to be dealing with when it comes to auditing, three topics. Business processes and IT system is one, data analytics and SOC report. So I'm going to show you these topics that basically these are the new. This is the first one. This is new. And this is why everyone's saying, go ahead, take the exam before these topics are tested on the exam. Business processes and IT specifically under area to assessing risk and developing a planned response. Basically, this section here to be more specific. So it's mostly application. Okay, it's not analysis, but it's application. Basically, we're dealing with IT, IT technology system, IT systems, IT applications so perform a walkthrough of significant business processes and document. We kind of know this a little bit from auditing the flow of relevant transaction and data from initiation through financial statement and reporting disclosure. Kind of we used to do this, but now they want it from an IT perspective, obtaining an understanding of the IT system that are directly or indirectly the source of the financial transaction. Again, notice here, they're focusing on IT, perform tests of the design of implementation of relevant internal control, application and manual, which is IT application and manual. So this is what they are focusing on the new thing. The second topic is data analytics. Again, we're going to see this topic again covered in BEC in a different format. Audit data analytics. This is basically you have to know this, verify the accuracy and completeness of the data, determine the attribute structure and sources of data needed, perform procedures and output from the audit data analytics. And this is what I'm going to be focusing on in the spring of 2021 is to add more about data analytics or the data analytics. So follow my channel, subscribe to my website and I should be covering this topic by the time you get to the exam and most colleges are teaching data analytics that's integrated under auditing course as well. So I will be doing that as well. The third part that's being added is SAC report one and SAC report two. Again, the SAC report also, you will see it again in BEC in the IT section and the enterprise risk management section. You will see them again, but this is the SAC report. Actually, at this point, I do have SAC in my product. So I do cover SAC because I do cover it when I teach my auditing course. So you have to understand the difference between SAC one and SAC two. You have to know the impact of testing the control because many companies are using the third parties nowadays. So that's why you have to understand understand SAC one and SAC two understand the difference. Notice mostly application, but remembering and understanding no analysis and no evaluation, which is good. Use SAC one type two report because we have SAC one type two and SAC one type one. We have SAC type two type one and SAC type two type two. So you just have to know the difference between them. Notice SAC type two. They're focusing on SAC type two, it seems. SAC one type two, SAC one type two. Understand the limitation of the internal control and potential impact on the risk of material misstatement. So this is the new material that you have to be familiar with. Again, three topics that are added and I just show them to you. The business processes and IT system, data analytics and SAC report one and two. Should you sweat about those and try to take audit before July 2021? Should you kill yourself over this? I don't think so, but if you want to wait, if you want to take it before July 20, July 20, July 1st, 2021, that's fine. But don't like, you know, if you're already if you're already studying for far, keep going. Otherwise, three topics, come on, it can be that bad. Can't you learn three additional topics? Okay. At the end of this recording, I'm going to remind you to visit my website, but let me let me clarify. I'm not saying you should not take audit if you can before July 1st, 2021, but you should not sweat about it and just like, Oh my God, this is a big deal. All what I'm saying is don't worry about it between your CPA review course and my website. You should be fine. You should be fine. So don't don't stress, but if you want to take it, take it. So before I end once again, visit my website. If not for anything to check out, how well is your university doing for the CPA exam? Study hard, stay positive, stay safe. You can do this into the next session. I would look at the fourth part, which is BEC and this way I will give you the update for the 2021 CPA exam changes. Subscribe and stay motivated.