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16.2 ERP, Accounting Systems, and Change Management
Uniform CPA Examination Exam
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1 Chapter 1: CPA Exam Structure and Licensure Rules
1.1 CPA Evolution Model 1.2 Eligibility, Credit Window, and Scheduling Rules 1.3 Scoring, Pass Rates, and Blueprints
2 Chapter 2: CPA Scoring, Interface, and Exam Strategy
Score Scale and Testlets MCQ/TBS Weighting by Section Sample Test Interface Tools Exam-Day Time Management
3 Chapter 3: AUD Ethics, Independence, and Engagement Acceptance
3.1 Professional Responsibilities and Independence 3.2 Engagement Acceptance and Continuance 3.3 Audit Documentation and Quality Management 3.4 Audit Risk Foundations
4 Chapter 4: AUD Risk Assessment, Controls, and Evidence
4.1 Assertions and Risk Assessment 4.2 Internal Control Design and Operating Effectiveness 4.3 Substantive Procedures and Audit Evidence 4.4 Sampling, Analytics, and Estimates
5 Chapter 21: AUD Sampling, Analytics, and Accounting Estimates
21.1 Audit Sampling Risk and Sample Design 21.2 Substantive Analytical Procedures 21.3 Estimates, Fair Value, and Specialists 21.4 Data Analytics, Exceptions, and Follow-Up
6 Chapter 22: AUD Integrated Audits, IT Controls, and SOC Reliance
22.1 ICFR Integrated Audit Framework 22.2 IT General Controls and Application Controls 22.3 Service Organizations, SOC Reports, and CUECs 22.4 Control Deficiencies and Material Weaknesses
7 Chapter 5: AUD Reporting, Attestation, and Review Engagements
5.1 Audit Opinions and Modifications 5.2 Emphasis, Other Matter, and Going Concern 5.3 Review, Compilation, and Preparation Engagements 5.4 Attestation and Government Auditing Signals
8 Chapter 36: AUD Workbook - From Risk to Report
36.1 Risk-Assertion-Procedure Drill 36.2 Evidence Reliability Drill 36.3 Control Deficiency Classification Drill 36.4 Report Modification Decision Drill
9 Chapter 6: FAR Financial Statements and Reporting Framework
6.1 Conceptual Framework and Standard Setting 6.2 Financial Statement Presentation 6.3 Cash Flow Statement and Disclosures 6.4 Not-for-Profit Reporting Basics
10 Chapter 7: FAR Balance Sheet Accounts and Rollforwards
7.1 Cash, Receivables, and Reconciliations 7.2 Inventory and Cost Flow Errors 7.3 Property, Equipment, and Intangibles 7.4 Debt, Equity, and Contingencies
11 Chapter 8: FAR Selected Transactions and Measurement Models
8.1 Revenue Recognition: Five-Step Model 8.2 Leases, Income Taxes, and Impairment 8.3 Business Combinations and Consolidations 8.4 Accounting Changes, Errors, and Subsequent Events
12 Chapter 32: FAR Revenue, Leases, and Income Taxes Deep Dive
32.1 Revenue Contract Modifications and Variable Consideration 32.2 Lease Classification and Lessee Accounting 32.3 Deferred Tax Assets, Liabilities, and Valuation Allowances 32.4 Simulation Workflows for Revenue, Lease, and Tax Exhibits
13 Chapter 31: FAR Financial Instruments, Fair Value, and Derivatives
31.1 Financial Asset Classification and Measurement 31.2 Fair Value Hierarchy and Disclosures 31.3 Derivatives, Hedge Accounting, and Embedded Features 31.4 Foreign Currency and Comprehensive Income Signals
14 Chapter 24: FAR Consolidations, Equity Method, and Intercompany Workpapers
24.1 Consolidation Decision and Noncontrolling Interest 24.2 Acquisition-Date Measurement and Goodwill 24.3 Equity Method Income, Dividends, and Impairment 24.4 Intercompany Inventory, Debt, and Fixed Asset Eliminations
15 Chapter 9: FAR Governmental Accounting and Fund Reporting
9.1 Governmental Fund Types and Basis 9.2 Government-Wide Statements and Reconciliations 9.3 Budgetary Accounting and Encumbrances 9.4 Governmental and NFP Comparison Traps
16 Chapter 23: FAR Not-for-Profit and Special Reporting Topics
23.1 Not-for-Profit Net Assets and Restrictions 23.2 Contributions, Conditional Gifts, and Agency Transactions 23.3 Functional Expenses and Statement Presentation 23.4 Interim, Segment, and EPS Reporting Traps
17 Chapter 37: FAR Workbook - Journal Entries, Rollforwards, and Reconciliations
Adjusting Entry Workflow Account Rollforward Workflow Reconciliation and Error Correction Drill Statement Presentation Workpaper Drill
18 Chapter 10: REG Tax Procedure, Ethics, and Business Law
10.1 Tax Practice Ethics and Preparer Responsibilities 10.2 IRS Procedure, Statutes, and Penalties 10.3 Contracts, Agency, and Business Entities 10.4 Secured Transactions, Bankruptcy, and Priority
19 Chapter 11: REG Individual Federal Tax Workflows
11.1 Gross Income, Exclusions, and Adjustments 11.2 Filing Status, Dependents, and Deductions 11.3 Credits, Payments, and AMT Concepts 11.4 Retirement, Passive Activity, and Loss Limitations
20 Chapter 12: REG Property Transactions and Entity Taxation
12.1 Basis, Realized Gain, Recognized Gain, and Character 12.2 C Corporations and Shareholder Transactions 12.3 S Corporations, Partnerships, and Basis 12.4 Entity Tax Simulations and K-1 Workflows
21 Chapter 25: REG Entity Choice, Basis, and Owner Tax Consequences
25.1 C Corporation, S Corporation, and Partnership Comparison 25.2 Formation Contributions and Built-In Gain 25.3 Distributions, Redemptions, and Liquidations 25.4 Loss Limits: Basis, At-Risk, and Passive Rules
22 Chapter 26: REG Property Tax, Character, and Deferral Transactions
26.1 Capital, Ordinary, and Section 1231 Character 26.2 Depreciation Recapture and Unrecaptured Gain 26.3 Like-Kind Exchanges, Involuntary Conversions, and Installment Sales 26.4 Related-Party, Wash-Sale, and Imputed-Interest Traps
23 Chapter 33: REG Trusts, Estates, Gifts, and Exempt Organizations
33.1 Trust and Estate Income Tax Basics 33.2 Gift, Estate, and Beneficiary Planning Concepts 33.3 Tax-Exempt Organizations and Unrelated Business Income 33.4 Fiduciary K-1 and Distribution Simulation Workflows
24 Chapter 38: REG Workbook - Tax Return Schedules and Basis Workpapers
38.1 Individual Return Classification Drill 38.2 Property Basis and Character Workpaper 38.3 Pass-through K-1 and Owner Basis Workpaper 38.4 Business Law Issue Spotting Drill
25 Chapter 13: BAR Business Analysis, Economics, and Forecasting
13.1 Financial Statement Analysis and Ratios 13.2 Variance, Forecasting, and Budgeting 13.3 Cost Accounting and Performance Management 13.4 Economics, Finance, and Decision Models
26 Chapter 14: BAR Technical Accounting and Advanced Reporting
14.1 Revenue, Leases, and Complex Arrangements 14.2 Derivatives, Hedges, and Fair Value 14.3 Business Combinations and Consolidations 14.4 SEC Reporting and Public Company Context
27 Chapter 15: BAR State and Local Government Analysis
15.1 Governmental Fund Analysis 15.2 Government-Wide Conversion Workflows 15.3 Budgetary Reconciliation and CAFR/ACFR Reading 15.4 Government Simulation Strategy
28 Chapter 16: ISC Information Systems and Data Management
16.1 Systems Architecture and Data Flow 16.2 ERP, Accounting Systems, and Change Management 16.3 Data Governance, SQL, and Analytics 16.4 Availability, Backup, and Recovery Controls
29 Chapter 17: ISC Security, Privacy, and SOC Engagements
17.1 Security Threats and Control Selection 17.2 Privacy, Confidentiality, and Compliance Frameworks 17.3 SOC 1, SOC 2, SOC 3, and Cybersecurity Reports 17.4 Service Organization Exceptions and User Controls
30 Chapter 18: TCP Individual Tax Planning and Personal Financial Issues
18.1 Nonroutine Individual Income and Estimated Tax 18.2 Passive, At-Risk, and Investment Planning 18.3 Retirement, Education, and Insurance Planning 18.4 Gift, Estate, and Beneficiary Concepts
31 Chapter 19: TCP Entity Compliance and Planning
19.1 C Corporation Tax Planning 19.2 S Corporation Basis and Distributions 19.3 Partnership Tax Planning and Allocations 19.4 Trusts, Tax-Exempt, and International Signals
32 Chapter 34: TCP International and Advanced Entity Tax Topics
34.1 International Tax Signals and Source of Income 34.2 CFC, Foreign Tax Credit, and Permanent Establishment Concepts 34.3 Consolidated Returns and Affiliated Corporations 34.4 Advanced Partnership and S Corp Planning Scenarios
33 Chapter 35: Choosing and Preparing for BAR, ISC, or TCP
35.1 Discipline Fit Matrix by Background 35.2 BAR, ISC, and TCP Blueprint and Skill Comparison 35.3 Discipline Study Plans and Practice Balance 35.4 Switching Disciplines, Retake, and Score Interpretation
34 Chapter 39: CPA TBS Research, Authoritative Literature, and Document Review
39.1 Document Review Simulation Method 39.2 Research and Authoritative Literature Workflow 39.3 Exhibit Overload and Relevant Data Selection 39.4 Written Explanation and Professional Judgment Drills
35 Chapter 20: CPA Simulations, Retakes, and Final Review
20.1 TBS Exhibit Triage and Workpaper Method 20.2 Section-Specific Final Review Plans 20.3 Score Release, Retake, and Credit Window Decisions 20.4 Four-Section Study Roadmaps
36 Chapter 40: Discipline Workbook Drills for BAR, ISC, and TCP
40.1 BAR Ratio, Variance, and Government Drill 40.2 ISC Control Evidence and SOC Drill 40.3 TCP Basis Planning and Entity Drill 40.4 Discipline Final Mock and Review Log
16.2 ERP, Accounting Systems, and Change Management
Key Takeaways Explain This Topic AI
Enterprise resource planning systems integrate accounting, purchasing, sales, payroll, inventory, fixed assets, treasury, and reporting data into connected, real-time business processes.
ISC questions often reconcile the documented process with the actual sequence of steps, documents, approvals, tools, and system activities, then locate the precise control gap.
Processing integrity means transactions are authorized, complete, accurate, timely, and valid throughout an accounting information system.
Effective change management requires authorization, testing, code review, separation of duties between development and production, logging, monitoring, and rollback procedures.
Direct, parallel, and pilot conversions create different implementation risks; the best approach depends on tolerance for disruption, cost, and the evidence needed before cutover.
Last updated: June 2026
ERP and Accounting Information Systems
An enterprise resource planning (ERP) system integrates major business functions in one application suite or tightly connected platform. A sales order can decrement inventory, a shipment can trigger billing, a cash receipt can update accounts receivable, and an approved vendor invoice can flow to disbursements and the general ledger, all in near real time. An accounting information system (AIS) may be a full ERP or a narrower set of applications that capture, process, store, and report accounting data.
For ISC, the tested skill is tracing the process . The blueprint expects candidates to reconcile the actual sequence of steps, documents, tools, and technology used in processes such as sales, purchasing, payroll, production, treasury, fixed assets, general ledger, and reporting against the documented (intended) process. A walkthrough follows one transaction from initiation to reporting: who performs each step, what system records it, what evidence is created, and what exception path exists when validation fails.
Modern AIS modules commonly include order-to-cash (sales, AR, cash receipts), procure-to-pay (purchasing, AP, disbursements), record-to-report (general ledger, consolidation, financial reporting), hire-to-retire (payroll, HR), and plan-to-produce (inventory, manufacturing). Each module shares master data such as the customer, vendor, chart-of-accounts, and item masters.
Because one master record feeds many transactions, master-data controls are leverage points : a single unauthorized change to a vendor bank account or a product price can corrupt thousands of downstream transactions, which is why the exam treats master-file maintenance as a high-risk activity requiring independent approval and change-report review.
Process-Mapping Questions
Process fact Likely CPA concern Better control response
Vendor bank details entered by accounts-payable clerks Unauthorized disbursements / fraud Independent approval plus daily change-report review
Shipping creates invoices before proof of shipment Revenue occurrence and cutoff System match of invoice to shipment document
Payroll rates changed without HR approval Accuracy and authorization Workflow approval and exception reporting
Manual journal entries bypass review Financial-reporting integrity Required approval, restricted posting rights, logging
Three-way match disabled for rush POs Validity of payments Re-enable match; supervisory exception review
The correct ISC answer usually names the gap precisely. "Weak controls" is too broad. Better reasoning says the disbursement was not independently approved, the invoice was not matched to shipping evidence, or the journal entry was posted without review.
Processing Integrity
Processing integrity means the system processes data completely, accurately, timely, and only as authorized, producing valid output. Controls are preventive (required fields, credit limits, three-way match, input edit checks) or detective (exception reports, batch totals, reconciliations). In a SOC 2 context, a CPA may need to identify a design deficiency or an operating deviation in a processing-integrity control.
Classic input edit checks worth memorizing:
Limit / range check: value falls within a permitted boundary (hours worked 0-80).
Validity check: entered code exists in a master file (valid GL account).
Completeness check: all required fields are present.
Reasonableness check: value is plausible given related data.
Check digit: an appended digit verifies an account or part number was keyed correctly.
Blockchain may appear, but the focus stays on internal control. A posted blockchain record may be hard to alter, yet management still must control private keys, approve transactions before posting, validate source-data accuracy, ensure interface completeness, and apply correct accounting treatment.
Change Management, Environments, and Conversions
Change management controls reduce the risk that hardware, software, configuration, or data changes disrupt operations or cause misstatement. Strong processes use change requests, authorization, acceptance criteria, code review, documented test evidence, version control, build automation, monitoring, logging, rollback procedures, and restricted production access .
Environments must be separated: development builds code, staging/test validates it, and production runs live transactions. Test layers include unit, integration, system, and user acceptance testing (UAT) . A developer who can both write code and migrate it directly to production violates segregation of duties, the single most common change-management defect on the exam.
Conversion approaches when replacing a system:
Direct (big-bang) conversion: old system stops, new system starts at once; fast and cheap but highest risk.
Parallel conversion: old and new run together so outputs can be compared; strongest evidence, highest cost.
Pilot conversion: one location, module, or group goes first; limits exposure before full rollout.
Phased conversion: modules go live in stages over time.
Patch management follows the same logic: prioritize by risk, schedule, validate compatibility, test before release where feasible, deploy through approved channels, and monitor results.
Emergency changes deserve special attention. A genuine break-fix may bypass normal approval to restore service, but the control is not abandoned: the change must be retroactively documented, reviewed, tested in lower environments after the fact, and approved promptly. A standing "emergency" path that becomes the routine way to skip review is itself the deficiency. Agile and DevOps pipelines compress these steps with automated build, test, and deployment, but the same control objectives apply: automated test gates, peer code review via pull requests, and separation between who writes and who approves a release into production.
Exam Focus
If a fact pattern describes a change moving to production, hunt for the missing control: no authorization, no test evidence, no logging, unrestricted production access, or no rollback plan. Name that specific gap rather than the general weakness.