Analysis of CPA Exam scores in recent years highlights one preparation strategy that candidates can take to the bank: scores go up when candidates devote more time and commitment to review.
The overall cumulative CPA exam pass rate runs about 50 percent. The 2015 cumulative pass rate through third quarter has come in at 50.8 percent. That shows a slight improvement from the 2014 cumulative rate of 49.7 percent. Pass rate percentages vary slightly by section and quarter with the range falling between 44 percent and 55 percent.
The American Institute of CPAs (AICPA) releases each year’s average passing rates for each section of the Uniform CPA Exam. The releases come every quarter. You can track the rates released by AICPA for the years 2006 through 2015 at CPA Examination Passing Rates. Passing rates for the first three quarters of 2015 can be found here.
Why is the Third Quarter Magic?
AICPA information shows best scores generally come in the third quarter of the year. The first quarter and fourth quarters see the lowest scores.
The months of January through February may see CPA candidates buried with work as they prepare year-end taxes for clients. Heavy workloads may leave little time for CPA Exam prep and produce lower scores for first quarter test takers.
Those who are employed may see a lighter work volume during third quarter that allows more time for study. Summer’s third quarter break gives students who are in school greater opportunity to concentrate on CPA review.
Don’t consider comparisons of passing rates for the four quarters as a guide to a magic third-quarter window. Instead, look at quarterly pass rates as an indication of how much increased study time can improve your scores.
Breaking Down Pass Rates by Section
The highest 2014 cumulative pass rate came in the Business Environments and Concepts section, which reached 55.5 percent. Through the first three quarters of 2015, BEC cumulative pass rate climbed to an all-time high of 57 percent.
Some analysts say candidates succeed at a higher rate with BEC because they leave BEC until last after passing the other three sections. Success in the other three sections predicts a better chance of succeeding on BEC. Good performance on BEC, which is the least technical of the sections, also may be traced to the lack of task-based simulations.
On the other end of the spectrum, CPA candidates say they have the most difficulty with Regulation and Financial Accounting and Reporting. Students find REG tests a great deal of non-accounting information such as tax law and business law, and they say the scope of FAR is daunting.
Yet, REG and FAR in the past few years are not recording the lowest pass rates of the four CPA Exam sections. The 2014 REG pass rate of 49.4 percent was the second highest among the CPA Exam sections in 2014. The 2014 FAR rate remains basically on trend at 47.6 percent.
Most think the reason FAR does not see the lowest pass rate is because students spend more time studying for the section they view as the toughest. Also, most CPA candidates spent a lot of time in school concentrating on FAR’s accounting courses.
Again, look at those passing rates as evidence that study can overcome the difficulty of the test sections.
Pass rates for AUD have fallen since introduction of a new format in 2011 with questions that test takers say can be vague and answers that can be tricky. Today the AUD pass rate is the lowest of all four sections. In 2014, success on AUD came in at 46.4 percent.