The Financial Accounting and Reporting (FAR) section of the Uniform CPA Examination (the 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 non-public), 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 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)
The FAR section is designed to have the following exam time and question types on the US CPA Exam:
|Section||Section Time||Multiple-choice questions (MCQs)||Task-based simulations (TBSs)||Written Communication|
The scoring weight of multiple-choice questions (MCQs), task-based simulations (TBSs) and written communication for FAR section on the US CPA Exam is as follows:
|Section||Multiple-choice questions (MCQs)||Task-based simulations (TBSs)||Written Communication|
The following table summarizes the content areas and the allocation of content tested in the FAR section of the Exam:
|Area I||Conceptual Framework, Standard-Setting and Financial Reporting||25–35%|
|Area II||Select Financial Statement Accounts||30–40%|
|Area III||Select Transactions||20–30%|
|Area IV||State and Local Governments||5–15%|
Here are a few tips to keep in mind while preparing for the FAR exam
1. Spend more time practicing questions, than reading/ learning theory. The MCQs are generally more practical in nature, than theory.
2. Most people find out why an answer is not right. However, always identify the cause of your correct answer, as well. Sometimes you may get the answer right by chance. Ensure the logic applied by you is sound. Reading the answer explanation is highly important.
3. Task-Based Simulations (TBSs) should be attempted after you have a stronghold in the MCQ section, since simulations do not always conform to chapter boundaries and can test concepts from various disciplines. However, if you are good with the entire MCQs section, you will not find the TBSs as difficult, they will feel like long-form MCQs.
4. FAR is quite voluminous when compared to the other 3 CPA sections. Consistent revision and notes of the chapters is required so that they remain fresh on your mind as the exam day arrives.
Read more about the US CPA related articles in our blog section: https://blogs.mileseducation.com/cpa/
Read more about REG: https://blogs.mileseducation.com/cpa/regulation-reg/
Read more about BEC: https://blogs.mileseducation.com/cpa/business-environment-and-concepts-bec/
Read more about AUD: https://blogs.mileseducation.com/cpa/auditing-and-attestation-aud-format-and-tips/