How Many CPA Exam Sections Are There?
Demystify the CPA exam: learn its comprehensive structure and the knowledge areas required for success in public accounting.
The Certified Public Accountant (CPA) designation is a highly respected credential within the accounting profession. It signifies professional excellence and adherence to ethical standards. This designation is a benchmark for expertise, opening doors to career advancement and reinforcing public trust in financial information.
The CPA Exam’s Four Core Sections
The Uniform CPA Examination is a comprehensive assessment that candidates must pass to earn their CPA license. It consists of four distinct sections. All candidates must complete three core sections: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG). In addition to these three core exams, candidates also select and pass one specialized discipline section from a choice of three options.
Content Areas of Each Section
The Financial Accounting and Reporting (FAR) section covers financial statement preparation and reporting. It encompasses U.S. Generally Accepted Accounting Principles (GAAP), including topics like revenue recognition and lease accounting. The section also includes governmental accounting principles and not-for-profit accounting standards.
The Regulation (REG) section is concerned with legal and ethical frameworks surrounding financial activities. It includes federal taxation for individuals, covering gross income, deductions, and tax credits. It also examines federal taxation for business entities, such as C corporations, S corporations, and partnerships, addressing concepts like tax basis and distributions. Furthermore, REG includes business law topics like contracts, agency relationships, and debtor-creditor law, alongside professional responsibilities and ethics for tax practitioners.
The Auditing and Attestation (AUD) section focuses on principles and procedures for audits and other attestation engagements. Candidates are tested on Generally Accepted Auditing Standards (GAAS), including audit planning, risk assessment, and the design of appropriate audit responses. This section also covers the evaluation of internal controls and the various types of audit evidence required to support an opinion. The content includes understanding and issuing different types of audit reports, such as unmodified, qualified, adverse, or disclaimer of opinion, and the requirements for attestation services like reviews and compilations.
The discipline sections allow for a deeper dive into specific areas. For example, the Business Analysis and Reporting (BAR) discipline includes advanced financial reporting topics, business combinations, and governmental accounting concepts beyond what is covered in FAR. The Information Systems and Controls (ISC) discipline focuses on IT governance, data management, cybersecurity, and the application of internal controls in technology-driven environments. The Tax Compliance and Planning (TCP) discipline explores more complex federal tax compliance for individuals and entities, including tax planning strategies and personal financial planning considerations.
Exam Structure and Question Formats
The Uniform CPA Examination is administered digitally, providing a standardized testing environment. Each of the four sections is a four-hour assessment, allowing ample time for candidates to demonstrate their comprehensive understanding. This consistent time allocation ensures a balanced approach to testing.
Each section of the exam features two primary question formats: Multiple-Choice Questions (MCQs) and Task-Based Simulations (TBSs). MCQs assess foundational knowledge through objective questions. These questions often form a significant portion of the total score for a section.
Task-Based Simulations require candidates to apply their knowledge to realistic scenarios, often involving spreadsheets or document review. These simulations evaluate higher-order cognitive skills, reflecting practical challenges for accounting professionals. The number and weighting of MCQs and TBSs can vary slightly, but both formats are integral to assessing a candidate’s readiness for the profession.