How to Pass the CPA Exam and Become a Licensed CPA

The Certified Public Accountant (CPA) credential represents a high standard of expertise and ethical conduct within the accounting profession. Obtaining this licensure signifies a deep understanding of financial principles, auditing standards, and tax regulations. It is a challenging yet rewarding pursuit, opening doors to diverse career paths in public accounting, corporate finance, government, and non-profit organizations. Becoming a CPA demands dedication and rigorous preparation, culminating in a comprehensive examination.

Understanding the CPA Examination

The CPA Examination is a uniform assessment developed by the American Institute of Certified Public Accountants (AICPA) and administered by the National Association of State Boards of Accountancy (NASBA). This standardized test ensures a consistent level of competency for all licensed CPAs across the United States. Since January 2024, the exam structure has evolved into a “Core + Discipline” model, consisting of three core sections and one discipline section.

The three mandatory core sections are Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG). The AUD section focuses on engagements to audit, review, and attest to financial statements, covering ethics, professional responsibilities, risk assessment, and reporting. FAR assesses knowledge of financial accounting and reporting standards for various entities, including businesses, non-profits, and government bodies. REG covers federal taxation for individuals and entities, business law, and professional ethics.

Candidates must also select one discipline section from Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP). Each section is a four-hour examination, incorporating both multiple-choice questions (MCQs) and task-based simulations (TBSs). TBSs are case study questions designed to test a candidate’s ability to apply knowledge to real-world scenarios, often requiring research or data analysis.

Each exam section is scored on a scale from 0 to 99, with a minimum passing score of 75 required for each part. This score is a scaled score, not a direct percentage of correct answers, and considers the difficulty of the questions. After passing the first section, candidates generally have a rolling 30-month window to pass the remaining three sections to retain credit for sections already passed.

Meeting Eligibility Requirements

Before embarking on the CPA Examination, candidates must meet specific eligibility requirements, which vary by jurisdiction. These prerequisites generally encompass educational attainment and, in some cases, professional experience. Candidates should consult the specific State Board of Accountancy’s regulations where licensure is sought, as these rules are not uniform across all 55 U.S. jurisdictions.

A common educational requirement across jurisdictions is the completion of 150 semester hours of college coursework. This typically includes a bachelor’s degree, which usually accounts for 120 semester hours, with the additional 30 hours often obtained through a master’s degree or further undergraduate courses. Jurisdictions generally specify a minimum number of accounting and business-related credit hours that must be part of this coursework. Many states require 24 to 30 semester hours in accounting and a similar range for general business credits. Accounting courses often include financial accounting, auditing, taxation, and managerial accounting, while business courses might cover economics, finance, and business law.

Beyond education, some jurisdictions mandate a period of supervised accounting experience before an individual can be licensed as a CPA. The length of required experience can range from one to two years, and it must typically be supervised by an active CPA. This experience is generally broad, encompassing areas like auditing, tax preparation, and financial statement compilation. Acceptable experience can be gained in public accounting firms, private industry, or governmental agencies, provided it meets the specific criteria set by the licensing board.

While less common, some state boards may have specific requirements regarding residency, U.S. citizenship, or a Social Security number. These requirements are subject to jurisdictional variation and should be verified directly with the relevant State Board of Accountancy. Candidates should review the specific rules of their chosen jurisdiction through their State Board of Accountancy’s website or NASBA’s resources to ensure full compliance before applying.

The Application Process

Once eligibility requirements are understood, the next step involves navigating the formal application process to take the CPA Exam. This process is primarily managed through a candidate’s selected State Board of Accountancy or NASBA’s CPA Examination Services (CPAES), serving as the gateway to scheduling exam sections. Candidates initiate their application, which typically involves submitting an online form.

The application involves providing specific documentation to verify eligibility. Official academic transcripts from all attended colleges and universities are required to confirm the completion of educational credit hours. For those with education obtained outside the U.S., a foreign credential evaluation from a recognized service is often necessary to determine equivalency to U.S. standards. If a jurisdiction requires experience verification prior to taking the exam, relevant forms detailing supervised work experience must also be submitted at this stage.

Upon completion of the application, associated fees must be paid. These fees can include an initial application fee, typically ranging from $50 to $200, along with examination fees for each section a candidate intends to take, which can be around $250 to $300 per section. Processing times for applications can vary, generally taking several weeks. After a candidate’s application is approved and all fees are processed, they will receive a Notice to Schedule (NTS). The NTS authorizes the candidate to schedule their chosen exam section at a Prometric testing center. It contains a unique identification number and is valid for a specific period, typically six months.

Scheduling an exam section involves using the NTS to book a date and time at an authorized Prometric test center. Candidates can select their preferred section and available testing slot through the Prometric website. Schedule well in advance, especially during peak testing windows, to secure desired dates. Rescheduling may incur additional fees if not done within the specified timeframe.

Preparing for the Exam

Effective preparation is essential for success on the CPA Exam, a rigorous assessment demanding comprehensive knowledge and strategic study. Candidates benefit from utilizing a variety of study materials tailored to the exam’s content and format. Commercial review courses are popular, offering structured lectures, digital textbooks, extensive question banks with thousands of multiple-choice questions and task-based simulations, and often flashcards for quick review. These courses cover all examinable topics in depth.

Developing a realistic and disciplined study plan is a key step in exam preparation. This involves allocating sufficient time for each section, recognizing that some sections like Financial Accounting and Reporting (FAR) may require more study hours due to their breadth. A well-structured schedule helps in consistently progressing through the material and prevents last-minute cramming. Setting achievable daily or weekly goals, such as completing a certain number of lectures or practice questions, maintains momentum and focus.

Successful study strategies emphasize active learning over passive memorization. This includes taking detailed notes, summarizing complex topics, and teaching concepts to others to solidify understanding. Spaced repetition, where challenging topics are revisited at increasing intervals, helps in long-term retention. Focusing on the underlying “why” behind accounting principles, rather than just the “what,” fosters a deeper comprehension for applying knowledge to varied problem sets.

Working through numerous practice questions and task-based simulations is important for familiarizing oneself with the exam’s structure and question types. This practice reinforces learned concepts and helps develop time management skills. Analyzing incorrect answers to understand the reasoning behind the correct solution is a valuable learning opportunity. As the exam approaches, taking full-length mock exams under timed conditions simulates the actual testing environment, helping candidates identify areas needing further review and build stamina for the four-hour sections.

Taking the Exam and Licensure

The culmination of extensive preparation leads to the CPA Exam day, an experience with specific procedures to ensure a standardized testing environment. Upon arrival at the Prometric testing center, candidates undergo a check-in process that includes presenting valid identification, providing a digital signature, and having a palm vein scan. Personal items are typically stored in a locker, and candidates are subject to strict rules, including no personal calculators, notes, or electronic devices in the testing room. The exam software provides a standardized interface, with built-in tools like a calculator and spreadsheet functionality. Breaks are allowed between testlets, though the exam timer continues to run during optional breaks.

After completing each section, candidates await the release of their scores. Scores are typically released in batches on specific dates throughout the year, published by NASBA. Candidates can access their scores through the NASBA candidate portal. The 30-month window to pass all four sections begins from the date the first section is passed. If a candidate does not pass all sections within this timeframe, credit for the earliest passed section(s) will expire, requiring them to retake those sections.

Once all four sections of the CPA Exam are successfully passed, the final phase involves applying for CPA licensure. This is a distinct process from applying to take the exam and requires submitting additional documentation to the State Board of Accountancy. If not already submitted during the exam application, final experience verification forms, signed by a supervising CPA, are typically required to confirm that the candidate has met the jurisdiction’s work experience criteria. Many jurisdictions also require candidates to complete an ethics examination, often a self-study course followed by a test, which focuses on professional conduct and responsibility.

The final steps involve paying any outstanding licensure fees and submitting all required paperwork. The state board reviews the complete application to ensure all requirements, including education, experience, and exam passage, have been met. Upon approval, the candidate is officially granted the CPA license, allowing them to use the designation and practice as a Certified Public Accountant.