CPA REG Exam: A Comprehensive Guide

The accounting world is in a transition as the CPA Evolution 2024 is up the road. It is a transformative step to change the structure and content of the CPA exam in order to equip finance and accounting professionals with agile and futuristic technological accounting skills to meet the advanced needs and challenges of the F&A industry. To help understand your US CPA journey, we bring an interesting section of the four-section CPA course – Regulation (REG).

What is REG?

Under the US CPA course structure, Regulation (REG) is a critical section that validates your skills in business law, ethics, and taxation (Federal). Among these areas, taxation covers the majority of the REG syllabus. The section is geared to equip CPA professionals & students with taxation knowledge (personal, corporate, or partnership)

REG Traits 

Studying the REG section as part of the CPA course will expose you to understanding federal compliance and regulation and professional ethical standards. 

Wide exposure to situation analysis, cost analysis, and budgeting along with new-age computing skills.

Accumulate legal knowledge, build strategic communication with government agencies, and learn advanced regulation and compliance information. 

Leadership skills to enhance the decision-making process among the C-suite and executive leaders to amend workflow and business development. Acute time management skills in filing a report in compliance with the procedures and regulatory requirements before due time. 

Cracking the REG code

The REG exam comprises 5 tests over a 4-hour duration. It covers MCQs, TBS, and Written Communication. Federal taxation covers 60% of the REG syllabus. The skills tested in REG are comprehension, retention, analysis, and application abilities. 

You need to score 75 to pass the REG, and it is always advantageous to attempt the more challenging questions first and the easier ones next to fuel your credits.

As the pass rates for REG stand at 60%, high commitment, dedication, and 80-112 hours of exam plan strategy. Having a schematic study plan is good, but to support your learning style follow a VARK (video, audio, reading, and kinesthetic) approach to meet realistic expectations. 

Thoroughly read every concept in the REG CPA study material. Watch live online webinars, lectures, guest talks, cracking mock tests, and concept-based flashcards to supplement your reading of theories.

Process of CPA REG testing

The AICPA specifies “medium” and “tough” as the levels of difficulty for MCQ testlets. This shows what level of difficulty the testlet’s questions are on average. The second REG MCQ testlet adjusts to your performance on the first, just like the other CPA Test parts do.

Receiving harder or easier questions has neither an advantage nor a disadvantage, according to the AICPA, because the exam takes question difficulty into account when awarding grades. On a medium or difficult testlet, you can come across a question that is quite challenging. It is not worthwhile to waste significant test time attempting to determine how difficult your second MCQ testlet is.

Your initial MCQ test will be of medium difficulty. Your performance on the first testlet determines how challenging the subsequent testlet will be.

A challenging testlet will be given to you if you do well on the first testlet. 

In essence, questions that are difficult are worth more points.

Types of CPA REG questions

Pre-test and operational questions are present in the majority of REG testlets. Pre-test questions do not factor on your final exam score; only operational questions do. Nevertheless, it is impossible to distinguish between questions, so don’t waste your precious test time attempting to evaluate whether you can afford to miss a question.
Why do pre-test questions appear on the AICPA exam?

The AICPA strives to constantly change and advance the CPA Test. The AICPA is experimenting with pre-exam questions by mixing them in with actual exam questions on the REG and other CPA Test sections. This enables it to assess how well the questions will be suited for use in the future.

The operational questions can be used as a sort of control to evaluate applicant performance on pre-test questions because the AICPA already knows what topics and how difficult the operational questions are. Although nobody like being a test subject, especially on a test this challenging. However, keep in mind that your grade on these questions will not be taken into account.

Later versions of the exam will include operational questions based on the pre-test questions that adhere to AICPA standards. As part of the grading process, questions are given a level of difficulty during the pre-test phase, and they continue to go through statistical analysis depending on the actual exam.

How is the CPA REG Graded?

Every CPA MCQ and TBS testlet is graded by computers. Your ultimate score is scaled based on the complexity of the MCQs you properly answered, your performance on the TBSs, and the weights given to the various testlet types. 

For all CPA Exam parts, 75 points or more constitutes a passing grade. This does not necessarily imply that you must correctly respond to 75% of the questions. A high performance on the first MCQ testlet can provide you the chance to gain even more points on the second MCQ testlet since difficult MCQs are worth more points. You’ll need to develop a time-management strategy in order to maximise your score because difficult questions take more time to complete.

Pass Rates for CPA REG

REG has achieved the second-highest CPA Exam pass percentage over the past four years. Between 2018 and 2020, when it reached a peak of 62%, the cumulative REG pass rate increased rapidly. The REG pass rate dropped marginally to 60% in 2021. It consistently hovered around 50% from 2012 to 2017, sharing the second and third spots with AUD. In 2021, BEC had the greatest pass rate—about 62%—and FAR had the lowest—45%. The precise pass rates fluctuate a little bit from year to year, but for the previous few years, the relative difficulty of the CPA Test parts has followed that pattern.

Since 2011, the lowest and highest pass rates REG has published in a year are 44% and 62%, respectively. The 2020 pass rate was 62%, and performance into 2022 is looking well.

Time management for the Reg CPA Exam

Like the other CPA Test parts, REG has a four-hour exam period overall. The REG CPA Exam section’s five testlets are separate from one another. You must effectively manage your time so that you may finish all five testlets before the exam is over because the individual testlets have no time restrictions.

You should budget the following amounts of time based on the length of the exam and the time required to finish each testlet:

MCQs: 1.25 minutes each

TBSs: 18 minutes each

At the point where you can respond to questions in this short of a time will require a lot of practice. But as you study the content and finish more practice questions, you’ll gain knowledge of the subjects and become quicker.

• If you know you can answer a question in less time, do it. That way, you’ll have a little extra time to spend on more difficult questions.
• If you hit a difficult question and still haven’t settled on an answer after a minute and a half, make an educated guess, flag the question, and move on. If you have time later, you can return to it during your review.
• Work at a pace that lets you read and answer every single question

How Should I Prepare for REG?

In order to pass REG, you’ll need to become familiar with federal tax laws. It can be challenging to process this material. Hence, to crack the critical REG section and other critical sections of the CPA syllabus, choose one of the best CPA Review institutes in India where CPA training is offered through specialized informed by experts and industry practitioners in a more immersive, personalized, and engaging way.

Why choose Miles to earn your CPA?

Miles is the largest CPA training institutes in India. It offers the following:

• 200+ hours of CPA classes and classroom training over 28 Sundays. We provide Online Video lectures for those who need flexibility in their exam preparation or in locations where Miles classroom sessions are not conducted.
• Miles CPA Review has original McGraw Hill books authored by Varun Jain. They have exam-focused notes that include multiple aids for conceptual understanding and memory.
• Miles Online Test Bank Access for online practice questions and mock exams (8000+ MCQs and 500+ Simulations including enhanced Simulations and DRS).
• Logistical support – Exam Eligibility, Foreign Credential Evaluation, NTS, UAE /US travel.
• CPA licensure assistance.

Let us now understand the steps to pursue CPA licensure with Miles Education:

Step 1: February 2023, Start your CPA course with Miles.

Step 2: June 2023, Appear for BEC exam.

Step 3: October 2023, Appear for AUD exam.

Step 4: March 2024, Appear for FAR exam,

Step 5: July 2024, Appear for REG exam.

Step 6: Earn your CPA Licence & open a world of opportunities.

Miles Education will be happy to become the guiding light in your CPA journey. There’s no more time to wait or waste, you’ve got Miles to be a CPA!