The CPA exam
April 14, 2014
As one of the most difficult standardized examinations in existence, the Certified Public Accountant exam poses a great challenge while offering abundant reward to those who can pass it.
In general, graduates must have a certain number of credit hours, including a specified number of accounting, tax, and finance courses, to be eligible to take the exam. A bachelorís degree is usually not sufficient for the number of hours required - many graduates also acquire a Masterís degree or double-major in order to gain eligibility. Each state board of accountancy has its own requirements, so check with your particular board before applying.
The CPA exam is split into four sections, each with its own testing fee (generally around $200). Business Environment Concepts (BEC) tests your knowledge of finance, economics, and business practices. Regulation (REG) tests your knowledge of general legal concepts, such as contract law, and taxation. Auditing (AUD) tests your knowledge of internal control and generally accepted auditing standards. Finally, Financial Accounting and Reporting (FAR) tests your ability to apply generally accepted accounting principles to financial reporting situations. BEC and REG sections are 3 hours long, while AUD and FAR are 4 hours long.
There are several commercial avenues available to guide your study time. Prices range from hundreds of dollars for Wileyís self-study books to thousands of dollars for Beckerís comprehensive review course. Make sure you choose a review course that suits your particular study methods - thereís a lot of information to cover, so you donít want to get overwhelmed or bored by the wrong type of course.
If you already have a position lined up with an accounting firm, ask your human resources contact if the firm provides free access to a particular program. Many firms will pay for the Becker course provided that you promise to stay with the firm for several years.
On the date of your exam, youíll head to your requested Pearson testing center. Make sure to arrive early, and remember to bring your Notice To Schedule with you. You will be provided with dry erase paper and marker, so donít worry about bringing a pen and paper. In addition, you will not be able to take a calculator into the room - the testing program has a simple calculator included in the user interface.
The test itself is computer-adaptive, meaning that the program will give you harder questions the better you do. The first multiple choice question block will be normal difficulty, while the second and third will depend on how well you have done so far. Some of the questions are trial questions and will not actually be graded, but you wonít be able to distinguish a trial question from a real one.
If for some reason you fail one or more parts of the exam, donít sweat it. The average pass rate is just over 40% for each section in most years. Only 20% pass all four parts on the first try. Celebrate the sections you did pass with the knowledge that you can focus your efforts the second time around on a smaller range of information.
Donít rest on your laurels just yet, though, because the 18-month countdown starts now. If you still cannot pass the entire exam within 18 months of your first test date, the passed sections will expire and you will have to retake them. This can be both frustrating and discouraging, not to mention the fact that youíll be paying another $1,000 for your next full attempt.
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