The CPA Exam condenses years of formal education into four different topic areas. You can fully prepare yourself for this arduous 14-hour examination by understanding what sections are involved. Each section has specific content, time allotment, and format requirements.
1 – Auditing and Attestation (AUD)
CPA Exam Section AUD – Auditing and attestation focuses on planning the audit engagement to ensure an accurate representation of financial statement and operations data. It involves following specific industry-developed protocol to gather applicable documentation, developing a sampling test, and performing internal controls. Learn those long auditing item lists thoroughly.
Student will be expected to understand how to evaluate collected information and review any applicable engagement data. CPAs are expected to provide an independent opinion as to the accuracy and representation of management information. Candidates need to understand the different types of audit representations available and what situations each involve.
You will be expected to prepare communications. Know how to write all types of audit reports, ranging from a compilation to full-blown independent audit. Understand all elements.
This section takes four hours. It consists of seven short task-based simulations and three multiple choice testlets.
2 – Business Environment and Concepts (BEC)
BEC stands for basic economic concept. This section tests candidates knowledge about economic concepts affecting the exchange of goods and services in the global business world.
You will be tested on business structures like partnerships, SubChapter S, Limited Liability Corporations (LLC), C Corporations, sole proprietorships, and nonprofits.
Financial management is crucial for any business success. You will be tested on components of each financial statement line item. Know the interrelationship of each. Ratio analysis, proper recording and classification knowledge, plus financial projections may be included.
This section covers planning and measurement. CPAs must understand all facets of a client's business, products, services, and goals to help with tax planning, operational advancement, and/or loss leaders.
Information technology is included in this section. Understand credit card transactions, data information security, digital and electronic payment processing, software, and other areas that keep financial data flowing and safe throughout the enterprise's longevity.
You will be alloted three hours to complete the BEC section. Plan on it containing three written simulations and three multiple choice testlets.
3 – Regulation (REG)
This is where you knowledge about the accounting profession's responsibility to the public will be tested. Know your ethics, your State's requirements, and as much regulatory data as possible.
Business law is tested. Know all components of a contract (consideration, offer, legal capacity, and legal content matter) in detail. You will be tested on the UCC or Uniform Commercial Code.
All types of federal taxes will be examined in this section. Whether it involves individuals or entities including profit, governmental, nonprofit, or for-profit organizations – know the IRS code inside and out.
This section is allotted three hours. The format consists of six short task-based simulations and three multiple choice testlets.
4 -Financial Accounting and Reporting (FAR)
Financial statements are the foundation of the accounting profession. This section tests your knowledge about standards, concepts, and common items found on these documents. Know about diverse types of events and transactions. Be prepared by understanding all facets of a financial statement including opening, adjusting, and closing entries.
You will be tested on governmental reporting and accounting. Same holds true for not-for-profit organizations like schools, churches, charities, and nongovernmental entities.
This section is alloted four hours. There will be three multiple choice testlets and seven short, task-based simulations. Use a CPA Review Course like NINJA to thoroughly prepare.
Step into the CPA examination venue armed with a thorough, detail-oriented knowledge-base of CPA Exam Sections. Your confidence will transfer over into passing scores.