What Are the 4 Parts of the CPA Exam? A Detailed Look
Navigate the CPA Exam: learn its comprehensive structure, key content, and essential procedures for aspiring accountants.
The Certified Public Accountant (CPA) license is a professional credential in accounting, signifying a high level of expertise and ethical conduct. Obtaining this license is a significant step for career advancement, opening doors to diverse opportunities. The path to becoming a CPA involves meeting specific education and experience requirements, culminating in the successful completion of a comprehensive examination.
The Core Exam Sections
The CPA Exam is structured under the CPA Evolution model, which includes three core sections that all candidates must pass. These foundational sections ensure every newly licensed CPA possesses a robust understanding of essential accounting principles and practices, vital for protecting the public interest.
Auditing and Attestation (AUD) focuses on auditing financial statements and other attestation engagements. This section covers professional responsibilities, ethics, risk assessment, planned responses, and evidence gathering. Candidates are evaluated on their ability to apply auditing standards set by bodies like the AICPA and PCAOB, along with internal control concepts.
Business Analysis and Reporting (BAR) covers advanced financial reporting, managerial accounting, and economic concepts. It includes financial reporting requirements under FASB and SEC, business combinations, derivatives, and governmental accounting. This section assesses skills in financial statement analysis and the application of technical accounting principles for business decisions.
Taxation and Regulation (REG) covers federal taxation for individuals and entities, business law, and ethics. It includes federal tax procedures, property transactions, and taxation of individuals and business structures. This section also addresses professional responsibilities and legal aspects relevant to business operations.
The Discipline Sections
Beyond the core sections, the CPA Exam requires candidates to choose one additional “Discipline” section, allowing for a deeper dive into a specialized area of accounting. This choice completes the examination requirement, ensuring candidates demonstrate expertise in a specific domain relevant to their career aspirations. Successful completion leads to full CPA licensure.
Information Systems and Controls (ISC) covers information technology, data management, and IT-related internal controls. This section assesses information systems, data governance, security, privacy, and System and Organization Controls (SOC) engagements. Candidates choosing ISC explore how technology impacts accounting and financial processes, including IT audit and advisory roles.
Tax Compliance and Planning (TCP) builds upon taxation concepts introduced in the core REG section. It covers complex tax compliance, tax planning strategies, and advanced tax concepts for individuals and entities. This includes personal financial planning, entity tax compliance, and property transactions, preparing candidates for specialized tax roles.
Exam Format and Scoring
Each section of the CPA Exam is a four-hour assessment designed to evaluate a candidate’s knowledge and skills. The exam consists of two question types: Multiple-Choice Questions (MCQs) and Task-Based Simulations (TBSs). MCQs require selecting the best answer from several options, testing a broad range of topics.
Task-Based Simulations present practical scenarios, requiring candidates to apply knowledge to solve accounting problems, often involving research, calculations, or document review. These simulations assess higher-order skills such as analysis and evaluation. Each exam section typically includes five testlets, with MCQs in the first two and TBSs in the remaining three.
The CPA Exam is scored on a scale from 0 to 99, with a minimum score of 75 required to pass each section. This is a scaled score, not a raw percentage, accounting for question difficulty. The scoring process ensures consistency across different exam versions and reflects a weighted combination of performance on both MCQs and TBSs.
Scheduling and Taking the Exam
Before scheduling an exam section, candidates must obtain a Notice to Schedule (NTS), an official document issued by the National Association of State Boards of Accountancy (NASBA). The NTS authorizes a candidate to schedule and sit for specific CPA Exam sections. It includes the candidate’s name, authorized exam section(s), and an expiration date.
Once an NTS is received, candidates schedule their exam sections through a testing provider such as Prometric. Scheduling should occur well in advance to secure a preferred date and location, with a recommendation of at least 45 days prior to the desired test date. The NTS is valid for a specific period, generally six months, within which the exam section must be taken.
On the day of the exam, candidates must bring a printed copy of their NTS and an acceptable form of identification to the testing center. Security measures, including check-in procedures and a controlled testing environment, ensure exam integrity. Each section is four hours long; while breaks are allowed, the exam clock continues to run for certain breaks.