Everything You Need to Know About the CPA Exam

To be able to practice public accounting legally, as well as to prove to potential employers and clients that you have the necessary skills and are highly qualified, you must pass the unified certified public accountant exam and earn your certification. The exam is spread over 18 months, and it’s divided into four sections, each one lasting four hours. It takes passing all four sections and achieving a minimum score of 75 on a scale from 0 to 99 to earn a certificate. 

Once, passed, as a CPA, you may specialize in areas like forensic accounting, tax preparation, and personal financial planning. 

How to Prepare for the CPA Exam

Follow these steps to secure your place on the CPA exam, be prepared for each section, and achieve the necessary score to become a certified public accountant. 

1. Apply to Take the Exam

Both paper and online applications are accepted, but the one you must use will depend on the state you live in. The majority of states now use a centralized online application service provided by the National Association of State Boards of Accountancy. While applications are accepted online in most states, in 22 of them you must contact the State Board of Accountancy directly. 

2. Schedule the Exam

As soon as you get the notification to schedule the exam, pick a date that works best for you. If you need to change your exam date due to some issues, such as illness, or severe weather conditions, scheduling it earlier in the exam window may give you more opportunities to reschedule within the same window. 

 The validity of the Notice to Schedule (NTS) is typically six months in most jurisdictions. For instance, in California, Utah, and Louisiana it’s valid for nine months from the date of the issue, in Virginia, North Dakota, and South Dakota for a year, whereas in Texas it’s only valid for 90 days.

3. Go over CPA Exam Blueprints

The CPA Exam Blueprints outline in detail what will be on each of the CPA exams. Each section has a list of prerequisite knowledge and abilities, so you can study for the test as a whole with confidence. The blueprints can help you zero in on the questions, policies, and practices you should focus on.

4. Take Practice Tests

To get a feel for the CPA exam’s functionality and format, you can take practice tests that are available online. It’s estimated that you’ll need two hours for them. More in-depth explanations of each question and answer can be found in the accompanying tutorial topics, and as you progress through the quizzes, you’ll be given the option to view the correct answer or a sample written response to each question. 

5. Take a Self-Study CPE Course

Self-study courses to help you get ready for the CPA exam are available from the American Institute of Certified Public Accountants. You can pay for individual courses or subscribe to a larger online CPE library. Not only can you use these resources to get ready for the exam, but they might also help you improve your abilities and learn more about accounting. 

The CPA Exam Sections

1. Auditing and Attestation

The AUD section consists of 72 multiple-choice questions and 8 simulations of practical tasks. These two parts each count for half of the total section score. It covers four areas: 

• General principles, ethics, and professional responsibilities
• Assessing risk and developing a planned response
• Performing additional procedures and gathering evidence
• Devising conclusions and reports

2. Business Environment and Concepts

The BEC section consists of 62 multiple-choice questions accounting for half of the total section score. There are three written communications worth 15% of the total section score and four task-based simulations worth 35%. It covers five areas:

• Corporate governance
• Economic concepts and analysis
• Financial management
• Information technology
• Operations management

3. Financial Accounting and Reporting

The FAR section consists of 66 multiple-choice questions, worth half of the section’s total section score, and 8 task-based simulations, worth the remaining half. It covers four areas: 

• Conceptual framework, standard setting, and financial reporting
• Choosing accounts from the financial statements
• Choosing the operations
• State and local governments

4. Regulation

The REG section consists of 76 multiple-choice questions and 8 task-based simulations, each accounting for 50% of the total section score. It covers five areas: 

• Federal tax procedures, ethics, and professional responsibilities
• Business law
• Federal taxation of property transactions
• Federal taxation on personal income
• Federal taxation of entities

Conclusion

The State Board requires the certified public accountant exam in all 55 jurisdictions for those who want to practice public accounting. Training and experience requirements could vary by jurisdiction. To earn their CPA license, candidates in many jurisdictions must also demonstrate competence on an ethics exam.

Disclaimer: For more interesting articles visit Business Times.