The pass rate for the Certified Public Accountant exam is just below 50%. The exam covers a lot of material, 18 content areas, to be exact. Over 600 tasks and multiple-choice questions test your knowledge of the skills required of CPAs. The difficulty level of each task varies, and many are simulations of real-work tasks CPAs are expected to perform. What is it that makes the CPA so hard to pass?

What is the CPA EXAM?

In 1952, the CPA exam became the universal standard to prove mastery of the field of accountancy. It is the primary means of obtaining a certification in Public Accounting. The exam is not just a measure of how well a candidate can memorize facts; it is a measurement of their competence in the tasks, laws regulations of auditing, taxation, accounting, and business law.

Sections of the CPA EXAM

The CPA Exam is delivered in four sections, and each section contains five testlets.

Financial Accounting and Reporting (FAR)

FAR tests candidates on knowledge and skills related to the financial accounting and reporting frameworks used by business entities (public and nonpublic), not-for-profit entities, and state and local government entities.

The FAR has the following sections and their weight:

Content Area Allocations Weight
I. Conceptual Framwork, Standard-Setting and Financial Reporting 25-35%
II. Select Financial Statement Accounts 30-40%
III. Select Transactions 20-30%
IV. State and Local Governments 5-15%
Skill Allocation Weight
Evaluation -
Analysis 25-35%
Application 50-60%
Remembering and Understanding 10-20%

Business Environments and Concepts (BEC)

BEC test your knowledge of the business environments and related concepts.

BEC has the following sections and their weight:

Content Area Allocations Weight
I. Corporate Governance 17-27%
II. Economic Concepts and Analysis 17-27%
III. Financial Management 11-21%
IV. Information Technology 15-25%
IV. Operations Management 15-25%
Skill Allocation Weight
Evaluation -
Analysis 20-30%
Application 50-60%
Remembering and Understanding 15-25%

Auditing (AUD)

The AUD section tests your knowledge of the entire audit process, preparation, compilation, review engagements. and other non-attestation services.

AUD has the following sections and their weight:

Content Area Allocations Weight
I. Ethics, Professional Responsibilities and General Principles 15-25%
II. Assessing Risk and Developing a Planned Response 20-30%
III. Performing Further Procedures annd Obtaining Evidence 30-40%
IV. Forming Conclusions and Reporting 15-25%
Skill Allocation Weight
Evaluation 5-15%
Analysis 15-25%
Application 30-40%
Remembering and Understanding 30-40%

Regulation (REG)

The REG section tests your knowledge of ethics, business law, and federal taxation.

REG has the following sections and their weight:

Content Area Allocations Weight
I. Ethics, Professional Responsibilities and Federal Tax Procedures 10-20%
II. Business Law 10-20%
III. Federal Taxation of Property Transactions 12-22%
IV. Federal Taxation of Individuals 15-25%
IV. Federal Taxation of Entities 28-38%
Skill Allocation Weight
Evaluation -
Analysis 25-35%
Application 35-45%
Remembering and Understanding 25-35%

CPA EXAM Scoring

The Passing score for all exam sections is 75 or above. 

Multiple-choice questions (MCQs) account for 50% of each section’s score.

Task-Based Simulations (TBSs) account for 505 of the FAR, AUD & REG section scores, and 35% of the BEC section score.

Written Communication accounts for 15% of the BEC section score.

Section Type Weighting Testlet
Auditing and Attestation (AUD)

72 MCQs

9 TBSs

50%

50%

#1: 36 MCQs

#2: 36 MCQs

#3: 2 TBSs

#4: 4 TBSs

#5: 3 TBSs

Business Environment and Concepts (BEC)

62 MCQs

5 TBSs

3 Written Responses

50%

35%

15%

#1: 31 MCQs

#2: 31 MCQs

#3: 2 TBSs

#4: 3 TBSs

#5: 3 Written Responses

Financial Accouting and Reporting (FAR)

66 MCQs

9 TBSs

 50%

50%

#1: 33 MCQs

#2: 33 MCQs

#3: 2 TBSs

#4: 4 TBSs

#5: 3 TBSs

Regulation (REG)

76 MCQs

9 TBSs

 50%

50%

#1: 38 MCQs

#2: 38 MCQs

#3: 2 TBSs

#4: 4 TBSs

#5: 3 TBSs

Computers grade all of the CPA Multiple-Choice and Task-Based Simulation testlets. The final score is scaled according to the difficulty of the MCQs you answered correctly and the credit you receive on the TBSs.

See more about CPA Exam scoring.

Applying to take the CPA Exam

The busiest period for processing CPA applications is Summer, so apply early and expect the application to take at least six weeks to get processed. Your Notice of Test Scheduling takes around three to six weeks to arrive at any other time of the year. In most states, the NTS is good for six months once you receive it, and you can apply for more than one section at once.

See more about Applying for the CPA Exam.

How much time is required to finish the CPA Exam?

The Time limit for each section

Every section of the CPA exam is four-hours in duration. Each section is broken into five testlets. A testlet could contain up to 38 Multiple-choice questions and up to 3 task-based simulations. The BEC testlet contains 31 Multiple-choice questions, two task-based simulations, and three written communication questions. The testlets are not timed individually but are included in the total exam section time. You have to manage your time well if you want to finish within the allotted time.

Time limit to complete the CPA exam

In addition to a section time limit, you also have a time limit to pass the whole CPA exam. Candidates have 18 months to pass the remaining three sections of the CPA Exam. If you do not meet the time limit, you’ll lose credit for the first section you passed.

Strategies to pass the CPA Exam

Preparation is one of the biggest keys to getting a passing score on all four CPA sections. While preparation includes the concepts and testing material for each exam, it also includes registration, exam sequencing, and planning study schedules.

1. DO NOT sign up to take all four sections of the exam at once. 

Your Notice to Schedule is valid for six months, so if you schedule all four sections, then you have to take them all within six months. Most people can only handle one section at a time.

2. DO Determine the sequence that you want to take the CPA Exam sections

Knowing what order you plan to take each section will help you plan out our study schedule and make it easier to register for testing windows.

Some candidates want to get the longest section out of the way first. Others want to get the hardest section of the exam over with first. Still, others want to take the easiest section first to build their confidence. No sequence that is going to be the right one for everyone. What one candidate considers to be hard may be easier for another candidate. Some candidates will be taking the CPA exam straight out of college. However, others might be taking it after working for several years.

3. DO take a CPA review course, make a study plan, and stick to it.

The CPA exam is not an exam you can pass doing a last-minute review of the material or mastering test-taking strategies.

  • Choose a CPA review course that includes a comprehensive review of all subject areas and all question types on the exam.
  • Maximize your study time by planning a study schedule of at least 10-12 weeks for every exam section.

See more about CPA Review Courses.

4. DO take the practice tests frequently and track your progress.

Practice tests are a great resouce to supplement with CPA review courses. Practice tests can help drill down the material and test your knowledge. 

See more about Free CPA Practice Tests

Here are a few facts about each section that can help you determine the sequence to take the exams:

Financial Accounting and Reporting is the exam with the most content. Historically, it is the exam section that has the lowest pass rate at 46%.

  • There are several topics tested on FAR that will come up in the AUD, REG and BEC exam sections.
  • The content best reflects the typical college accounting coursework.
  • All four sections of the CPA exam have to be passed in an 18-month rolling period. The clock doesn’t start until you pass a section. Since the FAR takes the most time to study for and the FAR content overlaps in the other three section exams, you would have more time to study for and pass the other 3 sections.
  • Average study time: 105 hours

Auditing and Attestation

  • The AUD pulls a fair amount of information from FAR, so taking it right before or after FAR is a good choice.
  • Average study time: 85 hours

Business Environment and Concepts is the only exam section that includes written communication.  Historically, it is the CPA exam section that has the highest pass rate at 61%.

  • BEC is going to pull information mostly from your Operations Management, Managerial Accounting, and Cost Accounting classes.
  • Average study time 80 hours.

Regulation is the only exam section that does not pull much information from the other exam sections. 

  • The majority of the exam is tax-based.
  • Average study time: 90 hours

Study Strategies

Financial Accounting and Reporting

  • As you study for FAR, practice the relevant skills by creating journal entries for questions.
  • You should practice completing full schedules, such as an amortization schedule, as you study so you can do it quickly on exam day.

Auditing and Attestation

  • The AUD section of the exam is mostly conceptual, asking you to apply your judgment to questions about best practices, ethics, and proper procedure.
  • You need a thorough understanding of the Audit report, it’s sections, layout, and the several types of opinions that could be expressed.
  • Memorize the steps, standards, and procedures of an Audit. Understand what their purpose is and the issues they address.

Business Environment and Concepts

  • The Written Communication answers must be in the form of a letter or business memo. The goal is primarily to evaluate your writing, but you need to stay on topic.
  • Practice writing responses and have a good grasp of the fundamental concepts.

Regulations

  • Over 65% of the Reg. exam focuses on taxation, so you’ll want to make sure you know these rules and can apply them in tax related simulations.

What makes the CPA EXAM so hard?

The value of the certification. The exam difficulty is one of the reasons why so many aspiring accountants value the certification. 

Changes in accounting laws and regulations. Accounting is not a static field. Laws and regulations in tax, accounting, auditing change frequently. As laws and regulations become more complex, so must the exam, which certifies that a candidate has mastered this knowledge base and skill set.

The amount of content covered on the exam. The exam covers 18 content areas and includes over 600 representative tasks of varying difficulty levels.

The variety of question types on the exam. The test consists of a combination of multiple-choice questions, task-based simulation questions, and written communication questions. Each question type requires a different strategy.

The exam is a timed exam. The CPA exam has four sections.  Each section exam lasts 4 hours. Exam sections are not taken all in one sitting, but you must pass all four sections within 18 months, or the first section score is eliminated.

There isn’t any one thing or one section or one type of question that makes the CPA exam so hard. It is the entire scope of the exam, the time limit, and the value of the certification that causes so much test anxiety among candidates and results in a below 50% passing rate.

The good news is the right study plan, the right CPA review course, and exam strategies, will help you pass the CPA exam. 

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