Yay! 3 down! I hope I passed Audit on Saturday, but it was more difficult than I expected. On my first two sections of the CPA exam (FAR and REG) I didn’t really think that the testlets got harder as I progressed through the exam, which they’re supposed to if you do well on the prior testlet.

So, when I sat for AUD on Saturday, I kept track of how many questions I was unsure of. In my first testlet, I felt pretty shaky on 8 of the 30 questions. On the second testlet, I was unsure of 13 of the 30 questions. So there was a difference, and I noticed that the questions seemed to ask for more obscure details in the second section.

In the third testlet, I was unsure of about 11 of the 30 questions. I’m not sure how to rank that for difficulty. We seemed to go back to topics that I knew more about there, and that I think probably come up more in the daily tasks of your average auditor.

My methods of marking questions as unsure is hardly scientifically rigorous, and my samples of questions weren’t really big enough, but it was an interesting experience.

Another little statistic I compiled was my performance on the Wiley multiple choice questions that come as part of the Roger CPA Review package. When I get my AUD score, I can see how these raw statistics compare to my score on the actual CPA exam.

Note: The first time through, I did each problem set right after finishing the study unit on them. The second time, I did all of the problem sets in the span of one week right before I sat for AUD. As you can see, my scores improved quite a lot the second time, demonstrating how doing the practice questions themselves can help you learn.

On Monday, I have my only final exam for the semester – TAX. (My other classes had time-intensive projects which are all done!)

So, I’m working on studying that. It’s hard to sit down and focus on tax. I’d much rather be watching Roger’s CPA Review videos and learning about Audit.

Roger’s blog had a nice little summary of some changes that’ll be coming to the CPA exam over the next few years. It’s interesting to see how they’re changing the simulations. I wonder if it’ll make it easier. I wonder if it’ll make it a better test?

A few years ago, you had to take the CPA exam all at once. From what I’ve heard, you had a two day window and took two parts each day. That wouldn’t work very well for my study style, so it seems easier the way they present it now. But I’m sure there are other students who don’t like to drag out the studying the way I do! So, I wonder if they have shifted the difficulty from endurance to more difficult questions since then?

So, I’m working on my notecards for Chapter 3 of Roger’s CPA Review course. I’m about halfway through the initial review!

Studying slowed down a bit this weekend, as finals are approaching more rapidly than my Audit exam!

Last night I was busily working on a group project on my laptop, when I turned around to see my dog surrounded by bits of paper. My note ! And a little corner of my Roger study book. Luckily, I write in waterproof (and slobber-proof) ink, so the damage was limited.

I mentioned a couple of weeks ago that I picked XBRL (eXtensible Business Reporting Language) as an essay topic. In order to get course credit for my internship, I have to write a 15-page “Issues and Solutions” essay about, well, and issue I encountered during my internship, and the solution to that issue.

I have completed most of the research I need to write the essay. Essentially, I’m addressing the issue of spending time re-formatting financial data to be able to analyze it for audit tests. My solution is XBRL, but honestly, the benefits XBRL will provide go far beyond solving the issue I saw. This post is intended to be an explanation of XBRL, and also an exercise for myself to make sure I feel confident about how to define the concept.

XBRL is a tagging system, that together makes up a language. Each little piece of data that goes into a financial statement is electronically “tagged” with a label that defines what type of data it is.

Think about how tags we already use online: tags on blog posts can help you instantly pull up all of the posts that mention an issue you’re interested in. Using a common hash tag on twitter (example #sxsw) can make it easy for interested people to find all of the tweets about a certain topic.

My first reaction to what I read about XBRL was confusion about why we haven’t been using this for years. The technology involved is not exactly cutting edge, and there are so many benefits that it seems silly not to be using it.

I think that the main roadblock was getting XBRL coordinated and accepted by enough people. Of course, Twitter tags are much more useful when everyone tweeting about a particular event or topic makes an effort to use one common tag. Similarly, everyone using XBRL has to use the same tags for the same data to make full use of XBRL’s capabilities.

That’s why an XBRL taxonomy has to be developed. It is like a dictionary of tags, and defines all the tags that should be used for each particular type of data. The now-released US GAAP taxonomy has over 13,000 tags in it! What a way to demonstrate the complexity of financial statements!

So, okay, I guess there are some reasons behind why XBRL took so long to make it this far. And how far is it? Well in December, the SEC passed a ruling requiring that public companies with a market cap of $5 billion or more must file XBRL financial reports for fiscal periods ending on or after June 15, 2009. These reports will not be audited, and will be issued in additional to traditional audited financial statements. Smaller public companies will have to begin filing with XBRL in the near future too.

My main conclusion though, after all my research, is that external reporting is just a small part of what XBRL can be used for. Rather than waiting for the SEC to require the switch, companies should be jumping to use XBRL as soon as possible, so that they can begin taking advantage of the internal uses of XBRL before their competitors do. Also, when they are required to begin using it, they will have more expertise than their peers, and may even find themselves in a position to consult with other companies about how to successfully manage the process!

This week, my client is what google maps tells me is an hour and half drive from my house.

I can do the drive 1 hour and 15 minutes if I leave during a lull in traffic, and every day I get braver driving on the highway. I think that that highway is a bit scary because the lanes are narrower than usual.

This is my first client where I’m expected to work long hours. My first few weeks, my seniors wanted me working as little as possible, I think, as everyone is paying more attention to budgets this year. This week I have some more responsibility, i.e. I get left alone here a lot more than at other offices.

By the end of each week, so far, I have felt like I am figuring it out, and like I understand what’s going on. Then the next week starts. And I’m totally confused all over again! The first few weeks, I could take my time over everything, to figure it out as I go along. This week, my senior definitely expects me to be moving faster, as this is the last week of the audit.

Once this week is done, I’ll be back closer to home, and with my senior from last week, who I absolutely loved working with. I’ll be on that client for 6 weeks straight, so it should be an interesting change from having 3 different clients in my first 3 weeks!