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NASBA regional update: private equity, alternative practice structures and uneven CPA exam pass rates draw board attention
Summary
NASBA treasurer and board member Andy Bonner briefed the board on NASBA’s work on alternative practice structures, a private equity task force, plans for a white paper, changes to CPA exam pass rates across sections, and NASBA technology initiatives.
NASBA treasurer and Tennessee board member Andy Bonner gave a detailed report on the NASBA regional meeting, highlighting work on private equity and alternative practice structures, disparities in CPA exam pass rates, and NASBA technology and licensure tools.
Bonner said NASBA formed a task force to evaluate private equity ownership arrangements and alternative practice structures (APS). He said the task force is drafting a white paper for state boards that will describe risks and potential regulatory responses, and that NASBA will provide a template of questions state boards can use to analyze firm structures and ownership disclosures. Bonner said the AICPA is also discussing private equity within peer review contexts and that the task force expects to present findings at NASBA’s annual meeting.
On the CPA exam, Bonner summarized NASBA and AICPA data showing uneven section pass rates. He said FAR (Financial Accounting and Reporting) had low pass rates — roughly 42% in the first quarter and 44% in the second quarter of the year — and that 60% of candidates who fail FAR do not retake it, according to NASBA material he summarized. By contrast, the ISC (Information Systems and Controls) section showed pass rates as high as 72% nationally and up to 81% for TSCPA. Bonner said NASBA and the BOE are reviewing discrepancies across sections and considering strategies to address curriculum and pass‑rate alignment.
Bonner also reported NASBA technology initiatives including an ALD (system) rewrite released in components this summer, a candidate mobile app, NASBA’s testing of controlled AI tools for customer service, and a licensure‑pathways map on NASBA’s website showing states that have enacted new pathways or mobility rules. He noted Tennessee’s pathway was confirmed with NASBA staff.
Ending
Bonner urged board members to follow NASBA materials and the forthcoming white paper on alternative practice structures; he and other board members recommended continued monitoring of private‑equity ownership risks and CPA exam changes.
