Becoming a Certified Public Accountant (CPA) is a significant milestone in the accounting profession. One of the essential steps in this journey is passing the CPA Exam. However, before diving into the exam preparation, it’s crucial to understand the CPA Exam format and its various sections. In this guide, we’ll break down the format, sections, and key tips to help you conquer the CPA Exam with confidence.
The Uniform Certified Public Accountant is a 16-hour examination comprising of four sections, each four hours long.
Before we get to the exam structure and the test items, all of us already know that there are 4 sections of the US CPA Exam – Financial Accounting and Reporting (FAR), Regulation (REG), Business Environment and Concepts (BEC), and Audit and Attestation (AUD).
Each Exam section is delivered in five smaller sections called testlets. These testlets feature multiple-choice questions (MCQs) and task-based simulations (TBSs). In the case of BEC, you also have to complete three written communication tasks (WCTs). The number of MCQs and TBSs tested varies depending upon the specific section taken. You will receive at least one research question (research-oriented TBS) in the AUD, FAR and REG sections. To complete them, you will have to search the related authoritative literature and find an appropriate reference.
During each Exam section, you will be offered a 15-minute break after the first TBS testlet. This is about midway through the section (two hours). You may accept this break and pause the Exam timer or you may continue testing. To accept the break, click the “Take a Break” button. During this break, you must leave the testing room and follow all Prometric security rules. The Exam timer will restart when the 15-minute break ends.
In addition to the 15-minute break, you may also take optional breaks after all other testlets but you cannot pause the Exam timer. The timer will continue to run.
You will be tested during the CPA Exam using three types of test items that appear within specific testlets in each section as explained above:
Multiple-choice questions (MCQ)
The multiple-choice portions are presented in the first two testlets of each Exam section.
Task-based simulations
Task-based simulations are condensed case studies that test accounting knowledge and skills using real-life, work-related situations. All task-based simulations are intended to assess knowledge and skills that are appropriate for an entry-level accountant. There are three TBS testlets in the AUD, FAR and REG sections, and two TBS testlets in the BEC section.
Written communication tasks
Written communication tasks appear only in the BEC section of the CPA Exam. For each of three written communication tasks, you must read a scenario and then write appropriate documentation relating to the scenario. The instructions state what form the document should take (such as a memo or letter) and its focus. Your response should provide the correct information in writing that is clear, complete, and professional.
The exam is designed by section, section time and question type as represented in the table below:
|
Section |
Section Time |
Multiple-choice questions (MCQs) |
Task-based simulations (TBSs) |
Written Communication |
|
AUD |
4 hours |
72 |
8 |
– |
|
BEC |
4 Hours |
62 |
4 |
3 |
|
FAR |
4 hours |
66 |
8 |
– |
|
REG |
4 hours |
76 |
8 |
– |
It is important to understand the scoring weight of multiple-choice questions (MCQs), task-based simulations (TBSs), and written communication for each Exam section as represented by:
|
Section |
Multiple-choice questions (MCQs) |
Task-based simulations (TBSs) |
Written Communication |
|
AUD |
50% |
50% |
– |
|
BEC |
50% |
35% |
15% |
|
FAR |
50% |
50% |
– |
|
REG |
50% |
50% |
– |
What Are the Four CPA Exam Sections?
Auditing and Attestation (AUD)
The AUD section of the CPA Exam tests the knowledge and skills that a newly licensed CPA must demonstrate when performing:
Audits of issuer and nonissuer entities (including governmental entities, not-for-profit entities, employee benefit plans and entities receiving federal grants)
Attestation engagements for issuer and nonissuer entities (including examinations, reviews and agreed-upon procedures engagements)
Preparation, compilation and review engagements for nonissuer entities and reviews of interim financial information for issuer entities
Newly licensed CPAs are also required to demonstrate knowledge and skills related to professional responsibilities, including ethics, independence and professional skepticism. Professional skepticism reflects an iterative process that includes a questioning mind and a critical assessment of audit evidence. It is essential to the practice of public accounting and the work of newly licensed CPAs.
The following table summarizes the content areas and the allocation of content tested in the AUD section of the CPA Exam:
Business Environment and Concepts (BEC)
The BEC section of the CPA Exam tests knowledge and skills that a newly licensed CPA must demonstrate when performing:
- Audit, attest, accounting and review services
- Financial reporting
- Tax preparation
- Other professional responsibilities in their role as certified public accountants
The content areas tested under the BEC section of the CPA Exam encompass five diverse subject areas. These content areas are corporate governance, economic concepts and analysis, financial management, information technology and operations management.
Financial Accounting and Reporting (FAR)
The FAR section of the CPA Exam assesses the knowledge and skills that a newly licensed CPA must demonstrate in the financial accounting and reporting frameworks used by business entities (public and nonpublic), not-for-profit entities and state and local government entities. The financial accounting and reporting frameworks that are eligible for assessment within the FAR section of the CPA Exam include the standards and regulations issued by the:
- 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 REG section of the CPA Exam tests the knowledge and skills that a newly licensed CPA must demonstrate with respect to:
- U.S. federal taxation
- U.S. ethics and professional responsibilities related to tax practice
- U.S. business law
Varun Jain CPA, CMA has worked very hard in ensuring that the Miles videos and text are consistent with the skill levels defined by the AICPA. Mnemonics and repetitions in videos and live/ webinar classes are used to ensure the student’s capacity to remember and understand the concept. With over 8000 MCQs and 1000 TBSs Miles ensures that the concepts taught are applied and the student is able to analyze and evaluate the questions asked in the CPA Exam.
61 thoughts on “CPA Exam Format & Sections Guide [2023 Update]”
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