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If you’re on your way to becoming a Certified Public Accountant (CPA), you might be losing some sleep over the Uniform CPA Examination®.
We don’t blame you. After all, the pass rates for each exam section range from about 40% to 60%, according to the American Institute of Certified Public Accountants (AICPA®)—not the best prognosis. The CPA exam is difficult and time-consuming, but passing it is the most important step of CPA licensure. And at the end of the day, becoming a CPA is worth it to many professionals.
Earning the CPA credential opens doors to high-paying, advanced accounting careers in numerous industries. The 2024 CPA exam comes with a few changes compared to previous years, so make sure to stay in the know if you plan to sit for the exam in or after 2024. We’ve outlined the new exam here to help you research and prepare.
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What Is the CPA Exam?
The Uniform Certified Public Accountant Examination, also known as the Uniform CPA Exam or CPA Exam, is for accountants pursuing CPA licensure. Many employers seeking highly trained accountants require a CPA license, which involves rigorous coursework and skill testing to earn.
AICPA develops the CPA exam, and the National Association of State Boards of Accountancy (NASBA) and its included state boards of accountancy assist with reviewing applications, administering the exam and reporting scores.
The CPA exam consists of four sections, testing candidates on topics like taxation, financial planning, auditing and accounting technology.
What’s New About the CPA Exam in 2024?
The 2024 CPA exam introduces a new “discipline” section, including three options:
- Business analysis and reporting (BAR)
- Information systems and controls (ISC)
- Tax compliance and planning (TCP)
Candidates choose one of the three disciplines to test on. Candidates must also test within the three required Core sections:
- Auditing and attestation (AUD)
- Financial accounting and reporting (FAR)
- Taxation and regulation (REG)
The 2024 version of the CPA exam eliminates the business environment and concepts (BEC) section and transitions some portions of FAR and REG into the new disciplines. Since the BEC section was the only one to include a written essay, the essay portion is eliminated from the 2024 CPA exam.
Additional changes include replacing an Excel spreadsheet with a JavaScript-based spreadsheet, implementing new task-based research simulations and eliminating multistage adaptive testing.
CPA Exam Requirements
Each state board of accountancy within NASBA sets its own requirements to sit for the CPA exam, so criteria may vary among states. However, many state boards require at least the following from candidates before they’re eligible to take the CPA exam:
- Be at least 18 years old
- Have a 120-credit bachelor’s degree in accounting or a bachelor’s degree with a certain number of credits in non-introductory accounting courses and business courses
- Submit official school transcripts, a credit evaluation application and proof of residency
Education requirements vary the most among state boards of accountancy. For instance, Georgia only requires exam candidates to have a bachelor’s degree with 20 semester hours in non-introductory accounting courses. However, Rhode Island sets more specific stipulations for CPA exam applicants who don’t have a graduate degree in accounting, including at least 24 accounting semester hours covering distinct subjects like auditing and tax accounting.
CPA Exam Structure
The three cores and three disciplines of the CPA exam each include both multiple-choice questions and task-based simulations. The exam lasts 16 hours in total—four hours per section—and candidates can take different sections of the exam on different days rather than in one sitting.
Still, test takers must complete and pass all four sections within 18 months—usually beginning on the day a candidate takes their first passed section—to pass the exam. We explore the four sections in detail below.
Auditing and Attestation
The AUD section tests a candidate’s understanding of the technical and ethical aspects of auditing for public and private entities. AUD also covers reporting requirements, risk assessment strategies, obtaining evidence and ethical responsibilities for CPAs.
AUD is divided into four content areas:
- Area I: Ethics, professional responsibilities and general principles
- Area II: Assessing risk and developing a planned response
- Area III: Performing further procedures and obtaining evidence
- Area IV: Forming conclusions and reporting
Financial Accounting and Reporting
The questions and tasks in the FAR section target three content areas:
- Area I: Financial reporting
- Area II: Select balance sheet accounts
- Area III: Select transactions
Within these sections, candidates prove their ability to prepare and analyze financial statements, balance sheets with various types of income and expenses, correct accounting errors, and navigate the differences in financial accounting and reporting for for-profit and nonprofit companies.
Taxation and Regulation
The REG section explores tax laws for businesses and individuals within the United States, ensuring that CPA candidates understand the significance of and procedures for compliance. Candidates work with taxation technology and resources to analyze data and determine the correct processes for accuracy and completeness.
This section includes five content areas:
- Area I: Ethics, professional responsibilities, and federal tax procedures
- Area II: Business law
- Area III: Federal taxation of property transactions
- Area III: Federal taxation of individuals
- Area III: Federal taxation of entities
Discipline
CPA candidates must choose one of three disciplines as the fourth section of the CPA exam.
Previous versions of the CPA exam included the BEC section, which explored corporate governance, information technology, financial and operations management, and economic concepts. The discipline section replaces BEC, allowing candidates to test in an area of interest or advanced skill.
This section offers the following testing areas:
- Business analysis and reporting: BAR expands on several concepts in FAR, including data collection sourcing, financial analysis and reporting, while closely examining business analysis and local and state governmental accounting.
- Information systems and controls: ISC focuses on secure and accurate data collection, storage and analysis procedures used in accounting. Candidates must demonstrate knowledge of information technology audits, security threats and mitigation, and security regulations.
- Tax Compliance and Planning: TCP digs deep into taxation for individuals and entities beyond what’s included in REG. TCP topics and tasks include calculating estimated tax payments, reviewing shareholder debts and investments, and distinguishing types of business entities for tax purposes.
How Is the CPA Exam Scored?
CPA exam scoring weighs the scaled scores of multiple-choice questions and task-based simulations of each section equally at 50% of the total score. The only exception is the ISC discipline, in which multiple-choice questions make up 60% of the score and task-based simulations account for 40%.
Each exam goes through a multi-step review process to ensure scoring accuracy.
How Hard Is the CPA Exam?
If AICPA’s pass rate data is any indication, this is a hard test. During the first two quarters of 2023, these were the pass rates for each section of the CPA exam:
- REG: 59.22%
- AUD: 47.68%
- FAR: 42.30%
- BEC (eliminated from the 2024 exam): 58.25%
How To Study for the CPA Exam
The CPA exam process is long and rigorous, so planning can be the key to passing each section. Before you begin studying, plan your timeline carefully.
In what order do you want to take each section? How will you space out the various sections to give yourself ample study time? Keep track of exam application deadlines, and think about when you should schedule study sessions. Also, consider whether you’ll need to take some time off work.
AICPA’s Exam Blueprints offer an excellent starting point for your test prep. The blueprints walk you through each section of the CPA exam, filling you in on what to expect and what to study.
CPA Exam Study Resources
AICPA offers official resources for continuing education for practicing accountants. Though you aren’t yet a CPA, you might find these materials helpful while studying for your CPA exam. They are categorized into many of the same topics you’ll work with on the exam, like auditing and financial reporting, and many are free or discounted for AICPA members.
You can also practice with a shortened sample test from AICPA, which familiarizes you with the CPA exam software.
Several other online resources are available to help you study for the CPA exam, although it’s important to ensure courses and materials are up to date and designed or taught by credentialed instructors. AICPA hosts a database of CPA exam preparation resources, including costs and user ratings for each to help you narrow your options.
CPA Exam Study Methods
Preparing for the CPA exam takes significant motivation and focus, and studying with other CPA exam candidates could help you stay on track. Consider looking for study group participants at work, through your local professional organization or from your graduating class. You might also find nearby candidates through social media groups.
Collaborate with your study group members to decide which materials you’ll use, whether you’ll host meetings in person or online, and how often you’ll study so everyone can stay on track.
If you’d like to study solo, find a quiet, dedicated space for sessions and make room in your schedule for several hours of exam preparation each week. Consider getting support from a trusted colleague or mentor when necessary.
Frequently Asked Questions (FAQs) About the CPA Exam
Is the CPA harder than the bar?
The CPA exam and bar exam are both known for their challenging content. However, based on the passing rates for each, the CPA exam generally appears more difficult to pass than the bar. Depending on the jurisdiction, the July 2023 bar exam saw pass rates ranging from 58% to 92%, according to the National Conference of Bar Examiners. The highest cumulative passing rate for any section of the CPA exam during the first two quarters of 2023 was 59.22%.
How many questions are in the CPA exam?
The CPA exam comprises between 250 and 282 multiple-choice questions, plus 28 or 29 task-based simulations, depending on the discipline section you choose. ISC has the most questions and simulations in total, followed by TCP and BAR.
