Certified Public Accountant (CPA) is the globally recognized and highly acclaimed level of certification in accounting. If you are interested in becoming one of the top accounting professionals, you must consider passing the CPA exam. It not only opens avenues of highest paying career positions, but you also hone your accounting skills. You can enjoy a competitive edge over non-CPA accountants in the business world.
The Board of Examiners (BOE) committee of the American Institute of Certified Public Accountants (AICPA) administers the CPA exam. The BOE is the face of the exam and answerable to the public. This committee coordinates with each state’s boards of accountancy for a smooth system of exam regulations and policies and works in collaboration with the Prometic and the National Association of State Boards of Accountancy for the delivery of consistent CPA examinations across all United States outlets.
What is the CPA Exam all about?
The exam includes four sections depending on the nature of the accounting subjects.
- Auditing and attestation
- Business environment and concepts
- Financial accounting and reporting
You may find some sections more difficult to pass than others due to your area of expertise, professional experience, and interests. However, you can count on the services of professional accounting learning platforms such as Efficient Learning to increase the chances of your success. You can easily access study and resource material online and instructors who can help you improve your weak areas.
All sections of the CPA exam are computerized and in the English language. Each section is based on smaller parts of test questions called testlets. A testlet may ask for a set of MCQs or task-based simulations or both at the same time.
The delivery of multiple-choice questions uses an adaptive model in an exam. For instance, when you attempt the first MCQs testlet, it is moderately difficult, followed by more difficult testlets based on your excellent performance or vice versa.
In written communication tasks, you need to write letters or memoranda based on the information provided. Several factors influence scoring in this part of an exam, including well-organized and well-presented ideas, clear presentation of supporting evidence, and the better use of business English.
A task-based simulation is based on the questions in case studies that are general for entry-level certified public accountants. For example, it may include working on spreadsheets, researching through a database, and generating forms. When needed, additional information and research materials become available to participants in the form of tax codes, professional standards, or FASB rulings. Your scoring in this part depends on accuracy.
The detailed information about each test section covering the duration, type, number of questions is given below.
Auditing and Attestation (AUD)
The auditing and attestation section exam lasts for four hours. It consists of three MCQs testlets comprising 60% of an exam and a simulation testlet with task-based simulations covering 40% of the exam.
You need to prove professional competence in internal controls, information collection and documentation, communications preparation, engagement planning and review, and information evaluation.
Business Environment and Concepts (BEC)
You have three hours to complete the business environment and concepts exam section. It includes three MCQ testlets and three written communication tasks, with one simulation testlet accounting for 85% and 15% for an exam, respectively. The business structure, financial management, economic concepts, information technology, and planning and measurement skills are tested in this section of the CPA exam.
Financial Accounting and Reporting (FAR)
The financial accounting and reporting section gives you four hours for exam completion and contains three MCQs testlets, one simulation testlet, and seven task-based simulations. The MCQs account for 60%, while the rest covers 40% of an exam.
In this section, you need to prove skills such as concepts and standards regarding financial statements, specific types for events and transactions, accounting, and reporting for various entities, including public, private, and not-for-profit organizations.
The regulation section lasts for three hours and contains three MCQs testlets and a simulation testlet with six task-based simulations. Both parts account for 60% and 40% of an exam, respectively.
In the regulation section, you need to prove knowledge on business law, ethics and corporate responsibility, procedures of federal taxation and accounting issues, federal taxation for individuals and entities, and property transactions.
What Are the Eligibility Criteria for the CPA Exam?
To appear for the CPA exam, you must have relevant education and professional experience.
The requirements for the CPA exam may vary in each state. According to up-to-date information, almost all US states require 150 credit hours for the CPA exam. In general, a baccalaureate degree program meets the 120 semester hours requirement only. To fulfill the additional 30 hours requirement, you must enroll in a master’s degree.
You must have one of the following educational qualifications to attempt the CPA exams.
- A bachelor’s and a master’s degree in accounting
- A bachelor’s degree in accounting with additional 30 credit hours of study in accounting and taxation at the graduate level of instructions
- A bachelor’s degree in another subject with a master’s degree in taxation or accounting or an MBA with an accounting specialization
- A dual degree program consisting of both bachelor’s and master’s degrees in accounting for five years
How Much Does the CPA Exam Cost?
The cost for each exam section varies. In general, you can expect to pay approximately $ 1,000 for all four CPA exam sections. But it is important to know that each state has different jurisdictions and exam fees managed by the board of accountancy.
Check the differences in fees before registration. For transcript reviews and online license verification, you may also bear additional costs.
The Test Scoring System
The AICPA develops the scoring system and evaluates the exams of the CPA candidates. The scale of the grading system starts from zero and ends at 99. To qualify for the exam, you must score a minimum of 75 marks out of 99 in each section.
With the CPA exam, you can find better and more rewarding career opportunities and have the edge over other professionals in the field. It is essential to understand that to ace the exam, and you must know when and how to start preparing for an exam.