Top 10 REG CPA Exam Tips
Regulation (REG) is one of the four Uniform Certified Public Accountant (CPA) Exam sections that deal with the US laws, ethics, and federal taxation. It is considered to be one of the most challenging exam sections. So, apart from a lot of hard work and commitment, you need proper guidance and some expert tips to ace the REG CPA exam in the first attempt.
The CPA examCPA ExamThe CPA Exam assesses accounting professionals not just on their financial knowledge, but also on their ability to review and seek out key abilities. is conducted by the American Institute of Certified Public Accountants (AICPA) in association with the National Association of State Boards of Accountancy (NASBA). The following table outlines all details related to the REG exam section.
|Number of testlets||Five|
|Duration of exam||Four hours|
|Type of questions||Multiple Choice Questions (MCQs) and Task-based Simulations (TBSs)|
|Number of questions||MCQ – 76|
TBS – 8
|Passing marks||75 out of 99|
|Main content||Business Law Federal Taxation Ethics, professional responsibilities associated with tax practice|
As the REG section is all about regulations, kindly polish your knowledge on regulatory concepts of accounting to score well. It is often considered a tough section to crack as it requires awareness of all rules related to law and taxation. However, candidates with experience in these areas may find it a bit easier.
Though the level of difficulty of the REG section depends on your individual strength and weakness, you will definitely benefit by following some specific tips. From keeping yourself updated on the tax laws to practising as many online mock tests as possible, here lies the list of top ten REG CPA exam tips.
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#1 – Know about content Weightage
The first and foremost step to ace this exam is gaining the complete knowledge of REG topics allocation. AICPA divides the overall content into five typical areas.
|Area 1||Ethics, Professional Responsibilities, and Federal Tax Procedure||10%-20%|
|Area 2||Business Law||10%-20%|
|Area 3||Federal Taxation of Property Transactions||12%-22%|
|Area 4||Federal Taxation of Individuals||15%-25%|
|Area 5||Federal Taxation of Entities||28%-38%|
Evaluate the weightage portion, list where to start from, and the amount of time to dedicate to each topic. This saves your time and facilitates a well-structured study routine.
#2 – Boost your taxation knowledge
Around 55-85% of the REG CPA Exam is about taxation, and hence, you must have a firm grasp of it to perform well. Usually, tax laws are tested after six months of enactment or issuance, whichever is later.
So, go through authorized websites (Internal Revenue Service and US Treasury Department) to stay updated on the ever-changing tax rules and regulations.
Divide your time into two parts, i.e., memorizing and application. Study one tax-related topic at a time and apply it in the current scenario for easier comprehension.
Also, keep regular notes of the taxation-related facts and figures. Go through them daily, at the end and the beginning of your study session.
#3 – Practice the concepts
Solve plenty of online mock tests, practice quizzes, and previous year question papers and compare the results. Swear by this tip to master the REG CPA exam section.
AICPA offers updated sample papers to CPA aspirants to get used to the natural exam-like environment and evaluate their performance. Go through the answer keys carefully and note down the topics you excel in and the ones that need more practice.
Answering different types of questions related to the same topic will boost your confidence level and knowledge. Besides, you will master the art of time management and know how to complete the entire exam within the stipulated time.
#4 – Learn through real-life examples
Needlessly, the best way to understand business and taxation laws is by using real-life examples. So, once you are done with a topic, look for a relevant example and go through it well to know how this works in real life.
The study of federal taxation laws might seem a bit confusing, tedious, or daunting at times. However, learning these concepts through real-life instances will help facilitate easy and quick understanding.
You can also take the help of a tax preparer and know how an entity utilizes federal laws in its day-to-day functions.
#5 – Upgrade your legal know-how and don’t ignore the ethics section
Apart from taxation, the REG section tests your understanding of business law and ethics. That is why you must have an impressive amount of legal knowledge to acquire flying scores in your REG CPA Exam.
Laws keep changing with time, and keeping a check on your legal knowledge will help you study what is currently relevant. However, the benefit here is that law topics do not change as frequently as the taxation ones.
Please note that the REG section will test for legal skills required by an accountant and not a lawyer. So, prepare from an accountant’s perspective. Also, do not underestimate the ethics and professional responsibilities section. Preparing well for the ethics section will also help you later while taking the CPA Ethics exam for licensing.
#6 – Don’t forget to take a break!
REG being a rule-oriented exam requires a lot of memorization and practice, which is undoubtedly a bit time-consuming and complex!
So, ease up the burden off your shoulders by taking a 20–30-minute break while studying complicated topics. This will help avoid confusion and give yourself the much-deserved breather.
You may take a break by:
- Studying an easier topic
- Taking a Nap
- Going through inspiring CPA profiles
Always remember that keeping your mind at peace is a prerequisite to passing this exam. Moreover, you can do that by taking frequent, short-duration breaks and indulge in something that you find calming.
#7 – Make a study plan (and stick to it)!
Whether you are a college freshman or a working professional, always make a personalized study plan with a realistic schedule for study sessions. This saves a lot of time and energy in achieving the desired goal.
It helps maintain a perfect work-life balance so that you can study well without compromising your lifestyle. You should wisely allocate your time daily for detailed study, practice, rest, and revision.
So, note down the number of questions to do in a day, optimize your time in the best way possible, and don’t overdo it. If possible, regularly update the number of questions answered in a day to track your performance.
Also, you can dedicate your weekends to covering your weak areas. Moreover, reward yourself for sticking to your study plan. This will keep you motivated.
#8 – Mind the Timing!
As per NASBA, REG is the second most challenging CPA exam section to qualify, after Financial Accounting and Reporting (FAR). Therefore, make sure to attend the former before or after an easier section.
You can follow the pattern of BEC-REG-AUD-FAR or REG-BEC-FAR-AUD. It assures that you get a breather before attending a more complicated exam. Starting with REG, or picking it after a comparatively easier section, like Business Environment and Concept (BEC), will ensure that you start with a light mindset.
However, your previous exposure to federal tax laws also determines the level of difficulty of this exam for you. If you have work experience in taxation or have a thing for memorizing rules, then you can take it up first and gain confidence.
Bear in mind that choosing the proper sequence for taking the exams is of paramount importance. It has an impact on your performance in every section.
#9 – Pick your preparatory material wisely
There are tons of REG CPA Exam preparatory materials available on the Internet, but you should pick the most suitable one as per your preferences. Please use only updated study materials to ensure that they reflect all the recent tax reformsTax ReformsTax reform refers to the changes and amendments made in the nation's tax structure or system to fix the loopholes and make it more efficient. It even ensures that there are fewer chances of tax evasion and avoidance by the taxpayers..
You can choose any of the following formats:
- Print Material/Book
- One-on-One Instruction
Go through the AICPA’s CPA Exam Prep Course reviews and ratings. Pick the one that deems fit to your budget and requirements. Also, consider your lifestyle, experience level (student/working), and specified time limit while making a choice.
The suitable preparatory material will make you well-equipped to perform well in the exam by offering techniques to solve even the most complex questions quickly.
#10 – Interact with legal experts
A final tip to ace the REG CPA exam section is to take help from practicing experts in the profession. There is no better option than consulting the legal professionals to know the ins and outs of the legal industry. They know what goes into making the laws, who is authorized to do what, and everything related to law.
Legal professionals can help you understand the intricacies of the following concepts:
- Audits, appeals, and judicial process
- Taxpayer penalties
- Tax preparer’s law duties and liabilities
- Contracts – Formation, Breach, and Remedies
Try to make notes or record your conversation with the legal experts for future references. If possible, you can also request a few relevant company documents (non-confidential) for better understanding.
With a passing rate of 59.29% (Q1 2021), the REG CPA exam section is not the one to underestimate. It demands you to master both theoretical and practical aspects of taxation, business law, and ethics.
Furthermore, following the REG CPA exam section tips above will help you keep on track, gain knowledge, and achieve results in no time. Besides, stay motivated, surround yourself with positive vibes, and dedicate your time and hard work in the right direction!
This has been a guide to REG CPA Exam Tips. This article provides you with the top ten REG CPA exam tips for aspiring students and accounting professionals. You may also have a look at the following articles –