To become a CPA, you must fulfill the requirements established by your State Board of Accountancy and pass the Uniform CPA Examination. The CPA exam, as it is informally called, is an intensive, four-part examination designed to ensure that only properly trained and fully qualified individuals become licensed as a CPA.
This exam tests your knowledge of the material that is covered in a typical accounting degree program, and demonstrates that you possess the expertise required to practice public accounting. CPA review materials and practice exams allow you to prepare for one section at a time, since each section covers different content within a particular topic.
While there have been some changes to the exam format with the roll-out of the new computer-based testing evolution (CBT-e) in January 2011, the exam still includes the same four sections:
1. Financial Accounting and Reporting (FAR)
This part of the CPA exam covers the knowledge and skills required to apply generally accepted accounting principles (GAAP) for business enterprises, non-profit organizations and government entities within the U.S. Topics include:
· conceptual frameworks, standards, standard-setting and presentation of financial statements
· financial statement accounts: recognition, measurement, valuation, calculation, presentation and disclosures
· specific transactions, events and disclosures
· governmental accounting and reporting
· not-for-profit accounting and reporting
As of January 2011, this section of the exam features three multiple-choice question testlets with a total of 90 questions, plus one testlet containing seven short task-based simulations. There are four hours allotted to complete this section of the exam.
2. Auditing and Attestation (AUD)
This section of the exam reviews knowledge of generally accepted auditing standards (GAAS) within the U.S. Topics include:
· engagement acceptance and understanding the assignment
· understanding the entity and its environment (including internal controls)
· performing audit procedures and evaluating evidence
· evaluating audit findings, communications and reporting
· accounting and review services engagements
· professional responsibilities
As of January 2011, this part of the exam consists of three multiple-choice question testlets with a total of 90 questions, plus one testlet containing seven short task-based simulations. There are four hours allotted to complete this section of the exam.
3. Regulation (REG)
This part of the CPA exam tests knowledge and understanding of tax practice issues, rules and regulations, as well as the legal implications of business transactions. Topics include:
· ethics, professional and legal responsibilities
· business law
· federal tax process, procedures, accounting and planning
· federal taxation of property transactions
· federal taxation of individuals
· federal taxation of entities
As of January 2011, this part of the exam consists of three multiple-choice question testlets with a total of 72 questions, plus one testlet containing six short task-based simulations. There are three hours allotted to complete this section of the exam.
4. Business Environment and Concepts (BEC)
This section of the exam covers knowledge and skills relating to business concepts and general business environments that professionals need to know to practice accounting. Topics include:
· corporate governance
· economic concepts and analysis
· financial management
· information systems and communications
· strategic planning
· operations management
As of January 2011, this part of the exam consists of three multiple-choice question testlets with a total of 72 questions, plus one testlet containing three written communication tasks. There are three hours allotted to complete this section of the exam.
Completing the CPA Exam
Before you can sit for the CPA exam, you must apply to your State Board of Accountancy once you have fulfilled all of the necessary requirements. If your application is accepted, you will receive a Notice to Schedule (NTS), and will then be able to schedule an appointment at a local testing center. While you can sit for one or more sections of the CPA exam during a testing window, you may not take the same section more than once within the same testing period.