Nuts and Bolts of CPA Exam

Nuts and Bolts of CPA Exam. Professionals always aim to attain an edge over their peers to achieve success and high positions and employers appreciate individuals who believe in continuously evolving and keeping themselves up to date with the latest market trends.

Let’s take a look at the CPA exam and warm ourselves for the numerous professional courses available for accounting professionals. The article will prepare you with a comprehensive know all about the exams to help you make the right career move. The nuts and bolts of the CPA exam will talk about the following:

  1. Why CPA is one for Accounting Professionals?
  2. About the CPA Program
  3. CPA Program Completion Criteria
  4. Why Pursue CPA Exam?
  5. CPA Exam Format
  6. CPA Exam Weightage/ Breakdown
  7. CPA Exam Fees
  8. CPA Results and Passing Rates
  9. CPA Exam Strategies
  10. Scholarship Opportunities
  11. CPA Exam Deferral policy

But before we jump into the nitty gritty of the CPA exam, let me give you a quick review on

Why CPA is one for Accounting Professionals?

  • The CPA Exam tests the accounting professionals for not only the financial knowledge but also reviews and seeks important skills before awarding the designation of the CPA. The CPA candidates are expected to have the ability to use authoritative database software and electronic applications such as word processing and spreadsheets as well as professional business writing skills.
  • The CPA Examination states in its mission that the purpose of the Examination is “To admit individuals into the accounting profession only after they have demonstrated the entry-level knowledge and skills necessary to protect the public interest in a rapidly changing business and financial environment.” Thus the CPA holders are meritorious professionals who have been duly tested for their qualification and skills before being awarded the designation. A CPA license is widely respected as an indicator of quantitative skills and high standards of professionalism.
  • The CPA course is advancement in an auditor’s career to achieve higher positions and earn a better pay package. An auditor is limited to entry-level jobs supervised by a CPA, thus the certification course is a must to enter the Big 4 firms that dominate the public accounting sector, PricewaterhouseCoopers,Deloitte Touche Tohmatsu, Ernst & Young, and KPMG.

Let’s now get on with the basic details of the program.

About the CPA Program

The American Institute of Certified Public Accountants (AICPA) holds the Certified Public Accountant (CPA) exam which is recognized across the globe for its competence. The AICPA is the largest accounting body in the world and anyone who wishes to work in the US or has to work with US based clients requires taking the examination hold by the AICPA. 55 states in the US have been granted the license to conduct the CPA certified exams. Each state has its own licensing requirements and pattern of exam as none of them is controlled by any centralized body. A CPA holder secures experience and training to be able to handle tax law questions or provide tax advice in his individual capacity to small businesses or big firms. He has the required in depth knowledge to assess the financial reports thoroughly.

  • Roles: Forensic Accountant, International Accountant, Auditor, Financial Analyst
  • Exam: The exam is divided into 4parts Financial Accounting & Reporting (FAR), Audit & Attestation (AUD), Regulation (REG) and Business Environment & Concepts (BEC). Multiple choice questions are asked in the exam with task based stimulation to check a candidate’s common sense and IQ. Furthermore written communication is given importance in the exam papers.
  • Exam Dates: The CPA Exam is offered during the first two months of each calendar quarter. The windows are as follows: January-February, April-May, July-August and October-November. All four sections of the exam can be attempted in any order or during any testing window. However, a candidate is not allowed to take the same section more than once during any single testing window.
  • The Deal: The CPA Exam tests the core concepts to see the candidate’s understanding and ability to apply the learning into fields of auditing and accounting standards.
  • Eligibility: Education which is equivalent up to five years is required to be eligible for this examination. The criteria set for the candidate requires a 4 year bachelor’s degree and preferably a master’s degree which should amount to 120 to 150 hours of credit in the business education domain.

CPA Program Completion Criteria

  • Students are required to attain a minimum 4 year bachelor’s degree and preferably a master’s degree which should amount to 120 to 150 hours of credit in the business education domain.
  • Before taking the examinations certain states require the candidate to complete at least two years of work experience.
  • A continuing education and knowledge seeking efforts are required on the part of the CPA to attain a renewal of the license. Some states may also expect the CPAs to pass the ethics course as a part of their continuing education agreement.

Recommended study hours: CPA candidates are required to spend at least 300-400 hours studying for all the four sections of the CPA exam.

What do you earn? A certificate that increases your value in the job market

Why Pursue CPA Exam?

The AICPA is a prestigious body and an exam conducted by it is looked upon with high regards since it is arguably the highest qualification a CA could achieve. The candidates have to meet specific criteria to be eligible for the exam and that ensures that the quality of the professionals is maintained. The CPA qualification holder enjoys the advantage of getting employment in public accounting department in American MNCs as well as the license to practice in the US.

There are certain jobs which the industry restricts for a CPA qualified professional such as launching a CPA firm or signing an audit report of a company, thus making it a valued professional degree for a CA. A CPA certificate holder is required to undergo practical training for a year or two under a licensed CPA and this ensures that the candidate has enough practice and creates a great no of contacts in this field before he is on his own in this industry.

CPA Exam Format

The four part exam is a fourteen hour overhaul which has been organized in four sections.

  • Auditing and Attestation is a four hour exam that tests the candidate’s knowledge on planning the engagement, internal controls, obtaining and documenting information, reviewing engagements and evaluating information and preparing communications.
  • Financial Accounting and Reporting needs to be cracked in three hours with focus on topics like –concepts and standards for financial statements, typical items in financial statements, specific types of transactions and events, accounting and reporting for governmental agencies, and accounting and reporting for non-governmental and not-for-profit organizations.
  • Regulation is of three hours and broadly covers the knowledge of ethics and professional responsibility, business law, Federal tax procedures and accounting issues, Federal taxation of property transactions, Federal taxation – individuals, and Federal taxation – entities.
  • Business Environment and Concepts needs to be written in three hours. This section covers knowledge of business structures, economic concepts, financial management, information technology, and planning and measurement.

The CPA exam consists of multiple-choice questions which represent 60% of the total score for three of the four exam sections, with the exception of Business Environment and Concepts (BEC). The rest 40% consists of simulations. Accounting knowledge is tested in simulations through a variety of tasks, some of which require searching databases, completing written communication exercises, and working with spreadsheets and forms.

Key Highlights about the Exam Format

Business Environment and Concepts is the only section that contains written communication task simulations. It measures the ability of being able to write effective and coherent business English.

  • Written communication responses are scored on the basis of three criteria:
  1. Organization – structure, ordering of ideas, linking of ideas one to another.
  2. Development – presentation of supporting evidence.
  3. Expression – use of standard business English.
  • Responses that do not address the assigned topic are not scored.

CPA Exam Weightage/ Breakdown

Audit and Attestation


Financial Accounting and Reporting




Business Environment and Concepts


CPA Exam Fees

Item Cost
Self-study review course $1300.00
Apply for 2 sections ($175.00 application fee + $190.35 for AUD + $171.25 for BEC) $536.60
Apply for 2 sections ($175.00 application fee + $190.35 for FAR + $171.25 for REG) $536.60
Re-apply for REG ($100.00 registration fee + $171.25 for REG) $271.25
Self-study ethics exam $125.00
Initial CPA certificate application $165.00
TOTAL $2934.45


CPA Results and Passing Rates

The results of the CPA exam are released by the AICPA to NASBA twice each testing window. The first release is typically in the middle of the second month of the testing window. All scores are released by the AICPA by the first week of the next window.

Candidates appearing for the exam in the first month of a testing window may qualify for an earlier release of scores, depending on the examination content administered to them, the examination volume and the distribution of examinees within the testing window.

After the AICPA releases scores to NASBA, they are forwarded to Boards of Accountancy for approval and are later released to the candidates. Boards of Accountancy determine the actual score release schedule. Candidates should note, however, that all scores may not be released at the same time. Additionally, candidates who test on the same day may receive scores at different times due to differences in necessary quality control procedures.

The CPA Exam is difficult to clear with pass rates as low as 50%.

Uniform Certified Public Accountant Examination Pass Rates

CPA ExamFacts Source: CPA Exam

CPA Exam Strategy

Every examination needs a strategy, don’t try to fool yourself into believing you know it all and can crack it at the drop of a hat. If overconfidence eats you always remind yourself that CPA is a great career booster but a very difficult hurdle that needs to be crossed. So, outlining a strategy is out right important and necessary.

  • Content Specification Outlines (CSOs)

    CSOs or better known as the scope of examination sections needs to be kept in mind before preparing yourself for the exam. You can avoid unwelcome surprises on the D day by making a note about what subject matter comprises every section. Review the Content Specification Outlines on the AICPA website before you begin to study for the examination.

  • Policy on New Pronouncements

    Keep yourself abreast with the new pronouncements done by the board and find out the new pronouncements to see the eligibility criteria is met by you or not. Review the Policy on New Pronouncements on the AICPA website when you are preparing for the examination to avoid unnecessary hassles and heartbreaks after studying tons of syllabi.

  • Confidentiality and Break Policy Statement

    Read the policy statement thoroughly and accept the confidentiality and break policy provisions before beginning the test. Review this in advance to understand the commitment you are about to make with respect to the confidentiality of the examination.

  • CPA Exam Tutorial and Sample Tests

    Take a look at the CPA Exam tutorial and learn to navigate through the examination to know what tools and resources will be available at the test center. After taking the tutorial, review the CPA Exam sample tests to get a thorough understanding of the content and observe the examination functions in action.

The sample tests provide a mock CPA Exam experience. It is an exact replica of the CPA Exam and provides an opportunity to get acquainted with the Examination’s format in an interactive environment. Candidates should familiarize themselves with the Examination as demonstrated in the functionality the tutorial before reviewing the sample tests.

The sample test software allows candidates to answer test questions that represent the entire question types found on the CPA Examination: multiple choice (MCQ), written communication (WC) and task-based simulation (TBS). The sample questions has answers attached to it however they are not intended for use as study materials in preparation for the Examination.

Tips During the Exam

  • Plan your Schedule: Note down the time you have to dedicate for each section and stick to them.
  • Read: Read through the questions thoroughly before jumping the gun. Questions with multiple correct answers are is ploys to confuse so do not get trapped.

CPA Exam Scholarship

Scholarships are offered in abundance by the AICPA to accounting students at varying points in their academic careers.

AICPA John L. Carey Scholarship Award 

The John L. Carey Scholarship Award provides financial assistance to liberal arts and other non-business related degree holders who are aiming to pursue graduate studies in accounting and are keen to attain the CPA designation.

Requirement Criteria

  • A student eligible for the CPA exam also should meet the following requirement to be considered for the scholarship.
  • A candidate should have a liberal arts or non-business undergraduate degree before enrolling for a graduate accounting program
  • At least should have earned 12 credits in accounting or business during their undergraduate program
  • Has been accepted, or is in the process of applying to a graduate program in accounting that is accredited by AACSB International or ACBSP
  • not actively involved in a graduate accounting program
  • Keen to pursue a CPA certificate in the future

Amount: $5,000/year

CPA Exam Deferral Policy

If the emergency occurs more than 24 hours prior to your examination appointment, contact Prometric to cancel or reschedule your appointment. If you have a hardship or medical situation that prevents you from sitting, please contact NASBA immediately and request an extension. Extensions are determined on a case-by-case basis and require documentation.

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