How Many Questions Are on the CPA Exam?

Understanding the structure of the CPA Exam is crucial for candidates aiming to earn their certification. This comprehensive assessment evaluates competencies across accounting and finance domains. The exam format includes multiple-choice questions and task-based simulations, testing both theoretical knowledge and practical application skills.

Breakdown of Each Section

The CPA Exam is divided into four sections, each focusing on a specific area within accounting and finance. This structure allows candidates to prepare strategically for subjects aligned with their career goals.

AUD

The Auditing and Attestation (AUD) section evaluates the auditing process, including planning, performing, and reporting on audits. It covers International Standards on Auditing (ISA), Generally Accepted Auditing Standards (GAAS), and the Sarbanes-Oxley Act of 2002. Candidates need a solid grasp of risk assessment, internal controls, and evidence collection. For example, understanding internal control frameworks like COSO is essential for assessing a company’s risk management processes. This knowledge ensures candidates can conduct audits that comply with regulatory standards and provide assurance to stakeholders.

BEC

The Business Environment and Concepts (BEC) section tests a candidate’s understanding of the broader business environment and its impact on operations. Topics include corporate governance, economic principles, financial management, and information technology. Familiarity with concepts like capital structure, working capital management, and IT systems is vital. Cybersecurity and data protection measures are also emphasized, reflecting the increasing reliance on technology in business. This section assesses a candidate’s ability to navigate and influence business environments effectively.

FAR

The Financial Accounting and Reporting (FAR) section focuses on financial accounting and reporting frameworks, such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). It includes topics like financial statement preparation, revenue recognition, and lease accounting. Candidates must interpret financial statements and apply accounting standards to various scenarios. An understanding of principles like the matching principle and revenue recognition, including ASC 606, is critical for navigating complex contracts and ensuring compliance with accounting standards. This section is essential for candidates pursuing financial reporting roles.

REG

The Regulation (REG) section examines taxation, ethics, professional responsibilities, and business law. It covers federal taxation for individuals and entities, including partnerships, corporations, and estates. Candidates should be familiar with the Internal Revenue Code (IRC) and provisions like the Tax Cuts and Jobs Act of 2017. Topics also include tax planning strategies, such as deferring income or accelerating deductions, and business law concepts like contracts and debtor-creditor relationships. This section tests a candidate’s ability to apply legal and regulatory frameworks to real-world scenarios, ensuring compliance and ethical decision-making in professional practice.

Multiple-Choice Questions

The CPA Exam’s multiple-choice questions (MCQs) evaluate a candidate’s ability to apply theoretical knowledge to practical scenarios. Each section incorporates numerous MCQs covering a wide array of topics, offering a comprehensive assessment of the candidate’s expertise.

For example, in the AUD section, MCQs may require candidates to identify audit procedures aligned with specific client scenarios. In the BEC section, questions might address financial management strategies or economic theories applied to real-world challenges. FAR section questions often focus on intricate accounting standards, such as lease accounting or revenue recognition, requiring precise application of principles. Similarly, the REG section may test knowledge of recent tax legislation, such as the implications of the Tax Cuts and Jobs Act of 2024, ensuring candidates are up to date on regulatory changes and capable of providing accurate tax advice.

Task-Based Simulations

Task-based simulations (TBS) require candidates to apply their knowledge to practical, real-world scenarios. These simulations involve analyzing data, completing financial documents, or making strategic decisions based on provided information. For example, a TBS in the FAR section might include adjusting entries on a financial statement based on new accounting standards. In the REG section, a simulation could involve preparing a tax return for a hypothetical client, incorporating current tax codes and deductions.

TBS challenge candidates to integrate accounting principles with analytical skills. They may also include technology-driven tasks, such as using spreadsheet software to perform financial analysis or evaluating IT systems’ impact on financial controls. This ensures candidates are proficient in both accounting theory and the use of digital tools, reflecting the modern accounting environment and preparing them for professional practice.