Understanding the Uniform CPA Exam

To advance to the highest levels of the accounting profession, you’ll need to pass the Uniform CPA Exam. Read on to learn about how the exam is structured and which types of questions you’ll encounter.

So, you want to be a Certified Public Accountant? You’ll need to clear a major (but surmountable) hurdle — the Uniform CPA Examination.

Why the CPA Exam Matters

More than ever, an accountant needs a high level of technical competence and analytical skill to serve clients effectively. With the advent of increasingly complex technology and finance practices, accounting professionals who wish to reach the top of their field are likely to need licensure as certified public accountants (CPAs). This exam is one component of the certification process — and the only one that is uniform across the United States and jurisdictions such as Puerto Rico.

Not all students who complete an education in accounting become CPAs, nor is passing the CPA exam necessary to work as an accountant. That said, preparing for and passing this assessment sends a strong signal to employers that you are disciplined enough to take on a challenging exam — and, in turn, that you will invest in advancing your career. In fact, many accounting firms do not offer senior opportunities to candidates unless they have passed this test — and it’s certainly essential if you aspire to become a partner in an accounting firm.

What You Can Expect: An Overview

The CPA exam is administered by the National Association of State Boards of Accountancy (NASBA) and is the only component of three licensure requirements — known as “the three E’s”: Education, Examination, and Experience — that is the same for all candidates. That is, each state board of accountancy establishes its own educational and professional experience requirements for candidates, but the CPA exam is the same for all testers throughout the U.S. and its territories.

Structure and Format

The test consists of four sections:

  • Auditing and Attestation (AUD): 90 questions and 7 task-based simulations (4 hours)
  • Business Environment and Concepts (BEC): 72 questions and 3 written communications tasks (3 hours)
  • Financial Accounting and Reporting (FAR): 90 questions and 7 task-based simulations (4 hours)
  • Regulation (REG): 72 questions and 6 task-based simulations (3 hours)

The exam is comprised of multiple-choice, written-communication, and task-based simulation questions. The specific content assessed is described in the Content Specification Outlines available through the American Institute of CPAs (AICPA) website.

The CPA exam is a type of computer-based assessment known as Multi-Stage Testing (MST) or Computer-Assisted Sequential Testing (CAST). Within each section (AUD, BEC, and so on), there are three “testlets” — that is, three minitests — of multiple-choice questions. The MST process determines the ordering of the difficulty levels — either medium or difficult — of the minitests. A tester will always be given a medium-difficulty testlet first. If she performs well on the first, she will get a difficult second testlet; otherwise, she’ll have a medium-level set for her second testlet. Likewise, the third testlet may be medium or difficult, depending on the tester’s performance on the first two.

Individual questions are classified as medium or difficult based on analyses of the performance of earlier testers, while the difficulty level of the testlets themselves will be determined by the proportion of medium and difficult questions within each of them. Testers who do well on difficult testlets earn higher scores.

Multiple-choice questions have four possible answer choices, and testers are not penalized for guessing.

In addition to the multiple-choice questions on the BEC portion of the test, there are written communication assessments, known as “constructed response,” in the form of three memos or letters that candidates must complete based on specific case scenarios. Testers are presented with a set of facts about a situation, and they must write a response that is legally correct, responsive to the question, organized, well-developed, and grammatically correct. The NASBA seeks to determine candidates’ knowledge of legal accounting practices as well as their ability to communicate clearly in writing. Because written communication is so vital to the accounting profession, the AICPA recommends that candidates prepare for this type of question by studying a writing style guide, such as Strunk and White’s The Elements of Style or The Business Writing Handbook by William C. Paxson.

For the AUD, FAR, and REG sections, candidates will encounter “task-based simulations,” questions that require responses to real-world problems that an accountant might face. For example, testers may be asked to fill in a spreadsheet or search a database for particular information. It’s important to note that the task-based portions of the exam do not change according to a tester’s performance on any of the sections.

You can find a tutorial and sample test on AICPA’s website.

Depending on which part of the overall exam you are sitting for, you should expect to spend between three and four hours at the testing site. Because candidates today are required to know more information for each part than they were in the past, most students prepare for one part at a time.

It is also important to know that candidates must pass all four parts within an 18-month timeframe. Failure to pass all four parts within this period will result in a student losing credit for — and having to retake — those parts previously passed.

Scoring

The CPA exam is scored on a scale of 0–99. You need a minimum of 75 on each of the four sections to pass. A higher score won’t benefit you professionally, but the American Institute of CPAs awards the Elijah Watt Sells Award to candidates who have obtained scores above 95.50 across all four sections of the test.

You should also note that there is no penalty for not doing well during a particular test administration, beyond having to retake the section to achieve a passing score. If you believe you fell short of your expectations, there is no need to cancel your score; simply come back and retake that section in the next testing window. In fact, there are practicing CPAs who retook one or more sections multiple times until they received a passing score!

CPA scores are first released to state boards of accountancy which, in turn, release them to testers. The precise dates on which candidates are given their scores varies according to when they took the test in each testing window (see below). To learn more about these timelines, visit NASBA’s website.

Scheduling

The exam is currently offered in the first two months of each quarter, a period known as the “open testing window.” There are four testing windows annually, but no testing offered in March, June, September, and December.

You may take any section once during the testing window, and you may take the various components of the exam in any order you wish. You also don’t need to pass one section before registering to take another. Moreover, you can take as few as one or as many as four sections in any window for which you register.

Cost

Costs vary from state to state, though testers must typically pay a fee for each section of the test they want to take, as well as an application fee for each exam administration.

To learn more about the exam or how to register, candidates can review detailed information at the AICPA and National Association Board of Accountancy websites.

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