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CPA Exam: All the Facts You Need to Know to Pass


To become a certified public accountant (CPA), you must sit for and pass your CPA exam. But before you can sit for the exam, you must meet the eligibility criterion. 


That means you’ve taken all the undergraduate and graduate-level accounting classes, including business law and any other general studies that your state requires. You must also log some work experience (a requirement in all except a few states).


When you meet these requirements, you’re good to go. All that’s left is for you to get ready to take the Uniform CPA exam. Considering how substantial this undertaking is, it’s good to learn all the CPA exam facts you need to know to pass.

What’s the Structure of the CPA Exam?

1. Financial Accounting and Reporting (FAR)

This section of the CPA exam tests your knowledge and understanding of the financial reporting framework used by business enterprises, non-profit organizations, and government agencies. 


The FAR section includes 66 multiple-choice questions and eight task-based simulations. The latter employ real-life work scenarios to test your skill.


The section deals with:

  • Standards for financial statements
  • What businesses should include in statements
  • How to report and account for government entities, not-for-profits, and other organizations


The examiner expects you to prepare financial statements. These include:

  • Balance sheets
  • Income statements
  • Statements of comprehensive income, retained earnings, cash flows, and equity


You must enter data into subsidiary and general ledgers and review source documents, and prove that you understand the process followed in setting accounting standards. 


In addition, you must convince the examiner that you understand the role that various industries and government groups play in this process. These groups include the Financial Accounting Standards Board (FASB), The U.S. Securities and Exchange Commission (SEC), the Governmental Accounting Standards Board (GASB), and the International Accounting Standards Board (IASB).


Most people consider the FAR section the toughest. You have up to four hours to tackle this part.


2. Auditing and Attestation (AUD)

If you have already tackled the FAR, you’ll find the CPA exam audit and attestation section fairly easy. The CPA audit exam format includes the following topics:

  • Planning and reviewing of engagements
  • Communications preparations
  • Obtaining and documenting information
  • Internal controls


The section contains 72 multiple-choice questions and eight task-based simulations. 


Candidates must demonstrate that they understand international accounting standards. Also, U.S. auditing standards and International Standards on Auditing (ISAs) differ, and you should be able to distinguish between the two.


You must identify unethical situations or those that might violate professional standards and demonstrate that you know how to mitigate such. 


Finally, you must identify the critical risks a financial IT environment will likely encounter.


Other things that the AUD section covers include:

  • Standards to employ when compiling audited financial statement reports
  • Internal control
  • Government auditing standards
  • Any other accountants-related communication standards
  • Compliance with laws and regulations


It’s in this section of the CPA exam that the examiner determines how well you understand the independence and ethics that AICPA, the Government Accountability Office, the Department of Labor, and the Sarbanes-Oxley Act of 2002 require.


3. Business Environment and Concepts (BEC)


The BEC section is the easiest of all CPA exam sections. In fact, often, test-takers perform well on their first try of this test. This section features a total of 69 questions. Of these, 62 are multiple choices, four are task-based, and three comprise written communication.


The test requires responding in a memo or letter format to a situation. The examiner uses this to assess your writing skills, organization, conciseness, and clarity.


This section of the CPA exam addresses:

  • Business structures
  • Information technology
  • Financial management
  • Economic concepts


Here, the task is to demonstrate your understanding of financial risk management, corporate governance, strategic planning, operations management, and financial management processes. The section also determines how well you understand the economic side of global business and its influence on any establishment’s business strategy.


You’re expected to evaluate quality control strategies and operations to manage and measure costs and performance. Also, you must assess business cycles’ impact on an enterprise’s operations.


Expect the examiner to test you on the duties, ethics, and rights of an organization’s board of directors, other officers, and employees. Questions in this section also cover:

  • The Committee of Sponsoring Organizations of the Treadway Commission (COSO)
  • Information systems and technology risks
  • The Sarbanes-Oxley Act of 2002 and the financial disclosures and corporate responsibility it necessitates

4. Regulation (REG)


The REG section of the CPA exam covers the following:

  • Ethics and professional responsibility
  • Tax procedures and accounting
  • Business law
  • Federation taxation policies employed on persons, entities, and property transactions


The section comprises 84 questions. Eight of these are task-based, and 76 are multiple choices.


As a candidate, you must show your understanding of a certified public accountant’s legal and professional responsibilities. You must also show that you understand what legal inference business transactions have concerning financial reporting, auditing, and accounting.


The AUD section covers widely used federal and state laws. You need to prove to the examiner that you know creditors, debtors, and guarantors’ duties, rights, and liabilities. Also, show that you understand the audit and appeal process that the Internal Revenue Service (IRS) employs.


It’s worth noting that this section also includes estate and gift taxation and alternative minimum tax.

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Here’s what you should know about the CPA exam definition and structure. It features 276 multiple-choice questions. The exam comprises 28 task-based simulations and three writing sections divided into four main parts.

How Much Time Do You Have to Complete the Exam?

As a candidate, you have up to four hours to tackle each of the four sections of the CPA exam. You can take these sections individually, and for you to be licensed, you must pass all four within 18 months.

Depending on your jurisdiction, the beginning of this 18-month time frame will vary.

CPA Exam Test Scoring

It’s the responsibility of the American Institute of Certified Public Accountants (AICPA) to develop the tests and score them. The institute grades each part of the exam on a scale of zero to 99. The lowest score you can attain to pass each section is 75.


Note that the total score for the FAR, AUD, and REG sections includes a combination of scaled scores from task-based simulations and multiple-choice questions. Each of these accounts for 50% of the total score.


As for the BEC section, the total score is a weighted combination of the three portions: 


  • Multiple-choice questions account for 50% of the total score
  • Task-based simulations (35%)
  • Written communication tasks (15%)

Final Thoughts

This guide covers most or all CPA facts you need to know about the exam to enable you to pass. The idea is to understand your timelines, the sections of the exam, and what each covers. Also, know the test scoring. This CPA exam information undoubtedly puts you on the road to succeeding. 

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