The CPA exam consists of four different parts. They include Business Environment and Concepts (BEC), Regulations (REG), Auditing and Attestation (AUD) and Financial Accounting and Reporting (FAR). This post will expound more on each of these sections so that you can have a clear overview of what to expect during the exam.
1. Financial Accounting and Reporting (FAR)
The FAR section is one of the most challenging parts of the exam. It deals with topics related to financial statements, accounting transactions, non-governmental accounting techniques, governmental accounting reports and nonprofit accounting practices. It also covers line items in financial statements as well as financial events related to the accounting statements being reported. The section is allocated four hours. It has 90 multiple choice questions categorized into seven-task based simulations and three testlets. 40 percent of the exam consists of task-based simulations while 60 percent consist of multiple questions. There are about 15 minutes allotted for administrative screens and another 15 minutes for breaks. This brings the total allotted time to four and a half hours.
2. Auditing and Attestation (AUD)
The AUD section covers everything to do with auditing. These include how to interpret auditing data, document retrieval, auditing internal controls and planning engagements. It also covers evaluation of audit information as well as reviewing engagements and preparing reports related to auditing. The exam has 90 multiple choice questions consisting of three testlets and seven task-based simulations. The simulations cover up to 40 percent of the exam while the testlets cover 60 percent. In order to pass this section, you must read widely on auditing standards and procedures and auditing ethics.
3. Regulation (REG)
The Regulation (REG) section is divided into two distinct parts. There is the law part and taxation part. The law part deals with business and ethics while the taxation part deals with taxation of real estate transactions and federal tax procedures. The section is allocated a total of three hours and consists of 72 multiple choice questions. These questions are divided into six simulation questions and three testlets. Like FAR and AUD, the simulation questions cover 40 percent of the exam while the multiple choice questions cover 60 percent. It is advisable you complete a full CPA review course before you attempt this section.
4. Business Environment and Concepts (BEC)
The Business Environment and Concepts (BEC) section involves topics related to business management. It touches on areas such as economic concepts, business structure and information technology. It also covers financial management and financial planning and measurements. The section is allotted three hours and consist of 72 multiple choice questions, just like the REG section. These questions are further divided into three testlets and three written communication tasks. The multiple choice questions take up to 85 percent of the exam while the remaining 15 percent consist of communication tasks. The BEC is the only part of the CPA exam that must be reviewed by a human since it contains questions that must be answered in writing. As result, it may take longer to get your results.
Knowing about the CPA sections discussed above is critical, as it will help you design an effective study plan and know how to tackle the exam. It is important to note that these sections are not arranged in a specific order. You can start with any of them during your CPA exam.