Everything you need to know about the CPA Exam

Deciding to pursue a career as a Certified Public Accountant (CPA) involves meeting educational prerequisites, including undergraduate and graduate coursework in accounting, business law, and general studies. Additionally, gaining relevant work experience is typically required by most states. Once these criteria are fulfilled, individuals are ready to undertake the Uniform CPA Examination, a comprehensive test that demands thorough preparation. Let's delve into the details.

CPA Exam Overview

The CPA exam comprises 276 multiple-choice questions, 28 task-based simulations, and three writing portions. These are categorized into four sections:

1. Auditing and Attestation (AUD)
2. Financial Accounting and Reporting (FAR)
3. Regulation (REG)
4. Business Environment and Concepts (BEC)

Candidates have four hours to complete each section, totaling 16 hours for the entire exam. The order in which sections are taken can be chosen by candidates. Passing all four sections is required within 18 months, and the beginning of this timeframe varies by jurisdiction.

Recent Changes: BEC Replacement

Notably, BEC is being replaced by three disciplines:

1. Business Analytics and Reporting (BAR)
2. Information Systems and Controls (ISC)
3. Tax Compliance and Planning (TCP)

Candidates can choose one option from these three, tailoring their specialization to core accounting, auditing, or taxation.

Test Scoring

The American Institute of Certified Public Accountants (AICPA) scores the exam on a scale of zero to 99, with a passing threshold of 75 for each section. The scoring includes weighted combinations of scaled scores from multiple-choice questions, task-based simulations, and written communication tasks.

Section-Specific Content

1. Financial Accounting and Reporting (FAR):

• Focuses on financial reporting frameworks for various entities.
• Covers standards for financial statements, accounting for government agencies, non-profits, and more.
• Examines the process of setting accounting standards and the roles of regulatory bodies.
  
  

2. Auditing and Attestation (AUD):

• Emphasizes planning and reviewing engagements, internal controls, and communication preparation.
• Tests knowledge of international accounting standards and ethical considerations.
• Addresses standards for preparing reports on audited financial statements and compliance issues.
  
  

3. Regulation (REG):

• Covers ethics, business law, tax procedures, and federal taxation.
• Examines legal responsibilities of CPAs, implications of business transactions, and federal and state laws.
• Includes topics such as alternative minimum tax, estate, and gift taxation.
  
  

4. Business Analysis & Reporting(BAR): 

• The Business Analysis & Reporting (BAR) discipline of the CPA Exam is designed to evaluate candidates’ knowledge of financial risk management and financial planning techniques, with an emphasis on data analytics. 
• It’s one of three disciplines candidates can choose from based on the exam’s core-plus-discipline model effective January 2024. Specific examples from the AICPA’s BAR blueprint include:

Conclusion

While the CPA exam is challenging, success leads to a respected professional designation and potential salary increase. Considering the difficulty of the exam, aspiring CPAs may find value in enrolling in top CPA prep courses to enhance their chances of success.