CPA Exam

Are you interested in pursuing a career as a Certified Public Accountant (CPA)? Individuals who enjoy working with financial information and are good at keeping records often find careers as CPAs fulfilling. Because most industries require financial oversight, those in this field often find employment easily and are well compensated. Becoming a certified CPA does, however, require significant time and dedication.


The specific job responsibilities of a CPA vary, but many complete tasks to safeguard the fiscal success and efficiency of their clients. Most are tasked with assessing a company or organization’s financial operations, as well as preparing and examining financial records. These professionals also ensure taxes are prepared accurately and paid on time. Additionally, CPAs may provide recommendations to board officials with the intent of reducing costs and spending, improving profitability, and boosting financial returns.


Other common duties include:


  • Maintaining financial records

  • Reviewing financial reports

  • Verifying company and legal compliance

  • Overseeing tax responsibilities

  • Examining account books

  • Establishing efficient accounting systems

  • Evaluating financial operations

  • Recommending better financial management procedures

  • Generating written and verbal financial reports

  • Communicating financial findings


What is the CPA Exam?


In order to become a CPA, you will need to complete the licensing process in the state you plan to practice. You will need to research the specific CPA licensure requirements as detailed on your state’s Board of Accountancy website before proceeding. While licensing regulations vary, many application guidelines include similar expectations.


Some typical requirements include:


  • Earn a bachelor’s degree or higher

  • Complete a minimum of 150 credit hours in accounting and business

  • Pass all four sections of the Uniform CPA Examination

  • Pass an ethics examination

  • Obtain the necessary professional work experience

  • Enroll in continuing education courses


Every state requires candidates to successfully pass the Uniform CPA Examination. This examination consists of four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). CPA candidates must pass all four sections within an 18-month period in order to qualify for licensure, but applying for multiple sections simultaneously is discouraged. Each section of the exam is four hours long and most states require a minimum score of 75 to pass.


Eligibility


Eligibility to sit for the Uniform CPA Examination varies depending on your state’s specific regulations.


In most cases, candidates seeking approval to take the examination must:


  • Be 18 years of age or over

  • Be a United States citizen, intend to become a United States citizen, or is a citizen of a foreign jurisdiction which extends like or similar privileges to be examined

  • Demonstrate good moral character

  • Meet state educational requirements


Every state requires CPA candidates to have, at minimum, an undergraduate degree in accounting or a similar field. A standard bachelor degree consists of 120 credit hours, but most states require CPAs to complete 150 total credit hours of coursework before applying for licensure. Some colleges and universities offer five-year accounting programs specifically designed to fulfill the 150 credit hour requirement.


Students may apply to sit for the Uniform CPA Examination before all the education requirements are complete. Assuming you can provide proof of your bachelor degree by the time you take the first examination, you can begin the testing process early.


Additionally, most states will require you to submit all application and examination fees, as well as provide the requested official school transcripts, reference letters, and supporting legal documents before sitting for the Uniform CPA Examination. Once approved, information regarding how to set your examination date will be provided.


How to Register


Once you have completed your state’s application process to sit for the Uniform CPA Examination and submitted all necessary documentation and fees, most states will send you an email confirming your eligibility. The state Board of Accountancy will also notify the National Association of State Boards of Accountancy (NASBA) that you have been approved to take the exam. NASBA will then send you a Notice to Schedule (NTS). This notice will provide instructions on how to schedule your exam date through Prometric, a technology-enabled testing and assessment provider. Any Special Accommodations for testing previously approved by your state must be provided at the time of scheduling and all appointments must be confirmed 24 hours prior to your examination time.


When to Take It


The Uniform CPA Examination is offered four times per year during the following testing windows:


  • January 1 – March 10

  • April 1 – June 10

  • July 1 – September 10

  • October 1 – December 10


Prometric generally sends exam data files to the Association of International Certified Professional Accountants (AICPA) for assessment within 24 hours of testing. The tabulation of your scores is treated with a high level of importance and may require weeks to complete. Target score release dates are available for reference. Candidates taking the Business Environment and Concepts (BEC) exam section should expect the process to take at least one week longer due to additional analysis.


Why Take the CPA Exam


All accountants are not required to become CPAs, but there are many benefits associated with obtaining this license. Due to extensive training and education, CPAs are legally able to provide a wider range of services to their clients. One example of this is tax preparation. While any accountant can prepare and submit taxes, only CPAs can represent their clients before the IRS during an audit.


Additionally, CPAs typically enjoy a higher income. In fact, it is not uncommon for CPAs to earn as much as 10 to 15 percent more per year than unlicensed accountants. According to PayScale, the average CPA salary is $65,032, while the average accountant salary is only $50,737. It is also worth noting that CPAs are generally better regarded than accountants. This means they are more likely to gain and retain clients over time.


How Much Does the CPA Exam Cost?


The fees associated with sitting for the Uniform CPA Examination depend upon the jurisdiction where you intend to become licensed. Most states require an exam application or administrative fee, which may be standardized or vary depending upon the number of examination sections you apply for at a time. There may also be registration fees associated with the process.


In most cases, you can also expect to pay $208.40 in examination fees for each individual section. There are no group discounts and you are discouraged from scheduling multiple exams at a time. It is also important to realize that there is no provision for withdrawing from the exam or requesting an extension. As a result, application and examination fees are rarely refundable.


CPA Exam Structure


You will have a maximum of four and a half hours to complete your chosen exam section, which is broken down into five smaller sections called testlets.


The schedule on the day of your exam will be as follows:


  • Welcome / Enter Launch Code – 5 minutes

  • Confidentiality / Section Information – 5 minutes

  • Testing – 4 hours

  • Break (after third testlet) – 15 minutes

  • Survey – 5 minutes


Financial Accounting and Reporting (FAR)


The Financial Accounting and Reporting (FAR) section of the Uniform CPA Examination is designed to test the knowledge and skills a professional must demonstrate in the financial accounting and reporting frameworks utilized by public and nonpublic businesses, state and local governments, and non-profit entities.


Relevant frameworks that may be assessed in the FAR section include standards and regulations issued by the following organizations:


  • Financial Accounting Standards Board (FASB)

  • U.S. Securities and Exchange Commission (U.S. SEC)

  • American Institute of Certified Public Accountants (AICPA)

  • Governmental Accounting Standards Board (GASB)

  • International Accounting Standards Board (IASB)


Regulation (REG)


The Regulation (REG) section of the Uniform CPA Examination is designed to test.


The knowledge and skills a professional must demonstrate with respect to the following:


  • United States federal taxation

  • United States tax practice ethics and professional responsibilities

  • United States business law


Relevant reference information for the REG section includes current textbooks covering business law, federal taxation, auditing, accounting, and ethics, as well as other administrative pronouncements regarding federal taxation. The Uniform Division of Income for Tax Purposes Act (UDIPTA), Revised Model Business Corporation Act, Securities Exchange Act of 1934, Uniform Commercial Code, and Treasury Department Circular 230 are also viable resources.


Auditing and Attestation (AUD)


The Auditing and Attestation (AUD) section of the Uniform CPA Examination is designed to test.


the knowledge and skills a professional must demonstrate while performing the following:


  • Audits of issuer and non-issuer entities, including government, non-profit, employee benefit, and federal grant entities

  • Attestation engagements for issuer and non-issuer entities, including examinations, reviews, and agreed-upon procedure engagements

  • Preparation, compilation, and review engagements for non-issuer entities and reviews of interim financial information for issuer entities


The AUD section also examines an individual’s ability to demonstrate knowledge and skill related to professional responsibilities such as ethics, independence, and professional skepticism.


Business Environment and Concepts (BEC)


The Business Environment and Concepts (BEC) section of the Uniform CPA Examination is designed to test.


the knowledge and skills a professional must demonstrate while performing the following:


  • Audit, attest, accounting, and review services

  • Financial reporting

  • Tax preparation

  • Other professional responsibilities as needed


The BEC section breaks tested content into five subject areas: governance, economic concepts and analysis, financial management, information technology, and operations management. Relevant reference information includes the Committee of Sponsoring Organizations of the Treadway Commission (COCO), Sarbanes-Oxley Act of 2002, current business periodicals, and current textbooks on accounting information systems, budgeting, economics, finance, management, and production operations.


Types of Questions You Can Expect


The Uniform CPA Examination utilizes three primary types of questions:


multiple choice, (MCQ), task-based simulations (TBS), and written communication tasks. The exact number of each will depend on the specific section you are taking.


Multiple Choice Questions (MCQs)


Every section includes multiple-choice portions during which test-takers must select the correct answers to questions from a list of options. This question type appears in the first two testlets of each section. The following is a breakdown of how many MCQs you can expect during the four exams.


  • AUD includes 72 MCQs

  • BEC includes 62 MCQs

  • FAR includes 66 MCQs

  • REG includes 76 MCQs


The scoring weight for MCQs in all four sections is 50%.


Task-Based Simulation (TBS) Questions


Every section includes TBS portions during which test-takers must answer questions based on condensed case studies that test accounting knowledge using real life, work-related situations appropriate for entry-level professionals. This question type appears in three testlets within the AUD, FAR, and REG sections, but only two testlets in the BEC section. The following is a breakdown of how many TBSs you can expect during the four exams.


  • AUD includes 8 TBSs

  • BEC includes 4 TBSs

  • FAR includes 8 TBSs

  • REG includes 8 TBSs


The scoring weight for TBSs in the AUD, FAR, and REG sections is 50%. The scoring weight for TBSs in the BEC section is 35%.


Written Communication


Only the BEC section includes written communication portions, in which test-takers must read a scenario and then write an appropriate document relating to it. Instructions regarding document type and focus will be provided. Responses must be correct and written clearly, completely, and professionally. There are three written communication responses that total to a scoring weight of 15% included in the BEC section.


AUD Section Primary Topics


The AUD section includes four primary topics, but the majority of exam questions will likely relate to performing further procedures and obtaining evidence. It is made up of MCQs and TBSs, which are both weighted at 50% for scoring purposes. Questions and tasks related to content remembering, understanding, and application are weighted most heavily.


A fantastic way to be successful on the CPA exam is by finding out how to examine for it. This does not mean that you have to memorize a hundred of pages and also do all the preparation in order to pass the CPA exam. Rather, it indicates to understand what kind of concerns you are going to be asked and afterwards prepare properly.


Each year, hundreds of individuals take the CPA exam. There are a number of reasons why lots of people fall short to succeed on their exams. Some might think that examining for the CPA exam is very easy and they find that they can accomplish all the prep work without considering it way too much. They get excited at the idea of their first reading as well as review and do not place any kind of efforts right into studying.


If you want to discover what your objectives are when you study for the CPA exam, you need to adhere to the standards offered below. Reviewing the CPA exam guide meticulously will aid you prepare for the test much better.


The laws CPA exam style has 2 areas. These 2 sections are information safety and law enforcement. In order to pass the CPA exam, you have to recognize these 2 sections.


Info security contains inquiries such as whether the organization has any type of safety steps in position for shielding its information. The concerns are based on whether the company has policies and also treatments that can keep the details safe. Each concern is based on the security gauges established to protect the info.


Law enforcement consists of questions such as whether the company shields workers that deal with sensitive matters. The questions are based upon the ethics of the organization. As you research, you will see that many concerns in the guidelines are based on the moral criteria of the company.


Each section of the CPA exam guide has actually been completely studied. There are no covert realities right here. Instead, you need to recognize what the specialists were discussing when they created the guides.


There are CPA exam concerns on areas such as whether the company has plans as well as procedures in place for training. The majority of the concerns are based on whether the training procedures are adhered to correctly. These types of concerns can be tricky if you are not familiar with the inquiry.


An additional vital thing to bear in mind when researching for the CPA exam is that the timing of the examination is commonly different. The CPA exam is separated into timed areas as well as additionally created areas. To be able to examine for the timed sections properly, you require to understand which area you are in and also what type of inquiry you are mosting likely to be asked.


The CPA exam format has not changed a lot for many years. The only thing that has transformed is the time when the test is taken.


Understanding when the examination is occurring is very important. You need to establish this by tracking when the test will be taking place. Remember that this is the only time that you will have to make certain that you check out the guide thoroughly and also recognize every section of the overview.


A great rule of thumb when studying for the CPA exam is to select one section to study as well as check out the inquiry very carefully. This aids to guarantee that you do not ignore anything. By planning for the examination early, you will certainly not have to invest regularly working with the questions.


This board develops, prepares for the examination, manages acquiring, checks examination web content for precision and additional importance as well as additionally interacts with exclusive state boards of book-keeping. Undoubtedly, this board is the face of the Cpa test as well as likewise service to the public. The BOE runs along with the National Association of State Boards of Book-keeping (NASBA) and Prometric, its picked assessment programmer and proctor, to consistently give the CPA exam across all U.S.


It is required to keep in mind that private states do protect some authority over the management of the evaluation. After Certified Public Accountant certifications have really been approved, nevertheless, the licenses' specialist motion makes it possible for technique throughout the USA or areas. Qualifications required for the CPA examination refer back to the very first 2 E's: education and learning as well as experience.


You may take any type of location of the CPA examination you wish; there is no demand that you take each area in successive order. It is normally suggested that you book your seat a minimum of 45 days before your test day, though you could schedule a place up to 5 days prior to the examination.


Presently, the fee for this examination is $835. The breadth of web material on the CPA examination makes it required to damage it up right into workable items. While specific evaluation questions could change, the test is constantly separated right into the identical 4 locations of accountancy understanding: Accounting along with attestation Service environment as well as additionally principles Financial accountancy as well as also insurance coverage Law Counting on your interests, areas of competence or occupation plans, you may uncover some sections a lot more challenging than others.


When you arrive at the screening center, you ought to provide your NTS in addition to 2 signed types of acknowledgment, among which need to be a picture ID. Under no circumstances will certainly you be allowed to sit for the assessment without these products in your residential or commercial property. Knowledgeable CPAs are recognized to remind their even more youthful peers that passing the CPA exam is a marathon, not a sprint.


Instances could include operating in spreadsheets, looking into an information source or creating or completing kinds. When required, included study products are offered in the kind of professional requirements, tax responsibility code or FASB rulings. Rating in these simulations is based upon accuracy. Developed interaction tasks need the candidate to craft interactions in the form of letters or memoranda, based upon the information provided.


Prior to picking an evaluation day, determine just how much time you'll require for every single activity at the same time. Remember, you have to work within Prometric's instead of a minimal period in your organization. Lots of individuals make up research time, yet ignore to think about the administrative activities in the process. Research jurisdictions and thoroughly check the Prospect Bulletin for specifics.