CPA exams are an integral part of any financial professional’s career. Passing all 4 of them demonstrates a mastery of the financial and accounting knowledge necessary to work in the industry. If you’re gearing up to take the exam, there’s a few things you should know first.
10 Things every accountant should know about the CPA exam
Many accountants will get a CPA to expand their job prospects, make more money, or switch to a new career. Here are 10 things all accountants should know about the CPA examination.
1. Eligibility for the exam
All 50 states require a bachelor’s degree with a minimum of 150 credit hours of coursework. That’s the traditional 120 credit hours to get a bachelor’s degree plus 30. Each state specifies how many hours of accounting-specific studies you need as part of the CPA exam requirements.
You must be at least 18 years of age to take the exam, and many states allow non-residents to get a CPA. The majority of states also require CPA candidates to pass an ethics exam.
2. The duration of the exam
Preparing for the CPA exam is not a quick process. Students will start studying after they qualify to take the exam, and they have an 18-month time frame to pass and take all sections after they pass the first section. The beginning of this time frame varies by jurisdiction and pass date.
Candidates have four hours to complete each section of the exam, of which there are 4. This brings the total exam time to 16 hours. It’s a good idea to space out your examination dates.
3. The exam structure
The CPA exam is separated into four parts: Auditing and Attestation (AUD), Regulation (REG), Business Environment and Concepts (BEC), Financial Accounting, and Regulation (REG). The exam has 276 multiple-choice questions, 28 task-based simulations, and 3 writing portions.
The test is scored on a scale of zero to 99, and you need at least a 75 to pass each section. Keep in mind that you aren’t dinged for wrong answers, so be sure to answer everything.
4. Cost and exam content
It costs approximately $1,550 to take the CPA exam. This cost covers the application fee, exam fees, registration fees, and ethics exam fees. If you decide to sign up for a CPA review course, you’ll add an extra $1,000 to $3,000 to your bill, making your total cost $2,550 to $4,550.
While that sounds expensive, selecting a CPA review course is more than worth it. Since exam content typically changes twice a year, an exam course can make sure you’re always prepared.
5. A prep course is worth it
A CPA review course is designed to help you pass all 4 sections of the exam, but is it worth it? According to the American Institute of Certified Public Accountants (AICPA), the average pass rate for the CPA is 45% to 55%. You have a coin-flips chance of passing this difficult exam.
When you take a CPA course, your chance of passing is greatly increased because you’ll study more efficiently, learn materials your professor doesn’t cover, and get the most current info.
6. Start with the FAR exam
Past CPA students agree that you should take the FAR exam first, followed by the AUD or REG, and finally, the BEC. FAR covers a little about every topic. If you focus most of your study efforts on passing the FAR, you’ll have a better understanding of the other, more in-depth sections.
When choosing between the AUD or REG, consider your accounting concentration. If you’re more familiar with tax, take the REG. If you’re better adept at auditing, take the AUD next.
7. Don’t underestimate the BEC
The BEC is the shortest section, which typically translates in students’ brains as being the “easiest.” No section in the CPA will be easy. You’ll have to spend an equal amount of time researching each section. Many people have failed the BEC due to a lack of studying.
However, an “easy way” to wrack up points is by completing the research-task questions. They’re normally graded as “all or nothing,” so do your best to ace them and get full marks.
8. Study your weakest subjects first
Speaking of exam difficulty, studying the sections where you’re likely to lose the most marks is a good strategy. These are usually the sections you’re not familiar with. It’s also a good idea to study answers to questions that will most likely appear in the written communication section.
With that said, try not to be intimidated by this section. There are only two questions in this section that are actually graded, and you’ll get full marks if you respect grammar rules.
9. Some questions aren’t graded
We mentioned that you don’t get dinged for wrong answers, but that doesn’t mean that not knowing the answer won’t stress you out. In the exam, you may have that “oh no” moment when you come across a question you didn’t study for or seems to not fit for your exam section.
Don’t panic; there’s a chance it’s a “pretest” question. These questions aren’t graded, but the AICPA puts them on CPA exams to get feedback on new material. You can skip them.
10. The CPA is a test of discipline
Many CPA hopefuls may benefit from hearing this advice: the CPA is not a test of intelligence; it’s a test of discipline. If you do poorly on this test, it doesn’t mean you’re incapable of becoming a CPA. What it may mean is that you didn’t spend enough time studying (or studying effectively).
A solid study plan can make a huge difference in whether or not you pass. Confidence can also help, which comes from being well-prepared. If you fail, simply study harder and try again.
The CPA exam is an important and difficult step in any financial professional’s career. Knowing what to expect can help candidates make the most out of their CPA status. By researching, studying, and coming up with an effective strategy, you can be well on your way to passing.