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Ultimate Guide to the CPA Exam Everything You Need To Know About Taking And Acing The CPA Exam

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One of the most prestigious careers in the business arena is a licensed Certified Public Accountant. However, many accountants never achieve this designation in their career because passing the CPA exam is a daunting hurdle that is required for licensure. Though the journey may be long, mentally taxing, and complicated, there are many benefits to becoming a CPA. Respect from colleagues, better job prospects, career stability, and increased salary potential should provide motivation to help you persevere through the endless hours of studying. With the right preparation, becoming a CPA is a goal within reach.

What is the CPA Exam?

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If you are a business student, you’ve most likely heard of the CPA exam, but maybe you are exploring your options and trying to decide if this is the right path for you. Perhaps you are a senior or graduate student ready to buckle down and fully commit to intense exam preparation. Either way, it’s crucial for students to understand the time and financial commitment involved before registering for the CPA exam. The CPA exam is a computer-based test created by the American Institute of Certified Public Accountants with significant contributions from the National Association of State Boards of Accountancy. The exam is broken into four distinct sections, with four hours allotted for each section. Candidates may register to take each section on a different day or choose to take two units on the same day.


A minimum of a bachelor’s degree is required to sit for the CPA exam. Additional eligibility requirements referred to as the “three E’s,” Education, Exam, and Experience, vary from jurisdiction to jurisdiction. So it is essential to check with the Board of Accountancy to ensure you meet all credentials. For example, many jurisdictions require 30 credit hours of advanced-level accounting courses beyond the bachelor’s degree. Obtaining an MBA or Master’s in Accounting should fulfill the 150-credit hour requirement.

Another common prerequisite is a minimum of two years of professional public accounting experience. This can sometimes be waived in exchange for teaching experience, government employment, or self-employment. Some states also have citizenship, residency, and/or social security number requirements to gain licensure. An ethics exam is also mandatory for specific states. Students who live in one of the states that require this exam will be glad to know that this 40-question test is open-book, so it can be passed with minimal preparation.

CPA Exam Format

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The four sections that make up the CPA exam include Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. The AUD section consists of 72 multiple choice questions covering four key areas: Assessing Risk and Developing a Planned Response, Ethics and Professional Responsibilities, Performing Further Procedures and Obtaining Evidence, and Forming Conclusions and Reporting. The BEC portion contains 62 questions about Enterprise Risk Management, Economics, Financial Management, Information Technology, and Operations Management. The FAR component is composed of 66 questions assessing knowledge regarding Conceptual Framework, Financial Statement Accounts, Financial Reporting, Transactions, and State and Local Governments. The final element, REG, requires students to complete 76 questions to demonstrate mastery of Federal Tax Procedures, Business Law, and Federal Taxation of Property Transactions, Individuals, and Entities.

Each section is broken into five smaller sections called test-lets. All areas except the BEC are scored 50% on multiple-choice questions and 50% on simulations that require a practical application. The BEC also includes a writing portion, and the score breakdown is 50% for multiple-choice questions, 35% simulation, and 15% for written responses.

Scoring and Pass Rates

For each section, scores are reported based on a scale between 0 and 99. In order to pass, students must receive at least a 75 on each unit within 18 months of attempting the first section. The CPA is a very challenging exam, and the 2020 pass rates for each section are as follows: AUD 47.97%, BEC 61.76%, FAR 46.37%, and REG 55.42%. Historically, pass rates have hovered around 50%.


The first CPA exam was administered in New York in 1896. The exam consisted of three components: Theory of Accounts, Practical Accounting, and Auditing. Starting with the first exam, candidates were required to score a 75 or higher in order to pass. Up until 1917, states designed their own exams. In 1917, the American Institute of Accountants, which is today the AIPCA, issued a standardized CPA exam as a requirement to attain membership into their exclusive organization. State accounting boards could also use this exam to grant CPA licenses, and by 1952 this exam had become the norm for candidates seeking CPA licensure in all states.

Up until 2003, the exam was only offered on paper and pencil twice per year, in May and November. Candidates who didn’t pass would have to wait half a year to reattempt the test, which could be very discouraging and led to many accountants entering the profession, but never receiving those unique three letters attached to their job title. Since 2004, the CPA exam has been administered electronically, and up until July 2020, four test windows were available per year. Continuous testing launched July 2020, which added 75 additional test dates to the calendar and made it easier for candidates to schedule exams when they have the most time to study and retest quicker if needed. Though the content has evolved on the CPA exams to meet changing business needs, the CPA designation remains the highest symbol of professional success for accountants.

How Do I Prepare for the CPA Exam?


Candidates should create a realistic timeline for completing all four sections of the exam. Carve out ample study time and try focusing on one section at a time. Most individuals spend a minimum of two to three months studying for each section. When establishing a schedule, aim to complete all four areas within one year. Candidates have an 18-month window to pass all four sections, but setting a 12-month goal allows an extra six months for any sections that you may need to retest on. This will prevent scrambling in panic mode with mere weeks or days to reschedule and pass a section. The test units may be taken in any order, so you may choose to knock the easiest ones out first and then devote your time to studying for the sections that you think will be most challenging.

Study Tips

You’ve been taking exams the majority of your life, so think about what study techniques worked best for you in the past and apply them to studying for the CPA. For example, think about when you are most focused and productive. If possible, try to study during those hours. Also, try studying one to two hours per day, rather than cramming. If you work full-time, you can try to study for a couple of hours after work each day and spend longer studying on the weekends. Don’t forget to plan study breaks and reward yourself for passing practice exams. Breaks may feel like you are wasting precious study time, but your brain can only process and retain a certain amount of information at once. If you are exhausted from studying, you won’t remember as much information as if you are alert.

Think about what type of learner you are. If you are a visual learner, try watching accounting videos and taking notes you can turn into flashcards. Even if the test prep program provides flashcards, writing the information in your own words will help you commit it to memory. Drawing a simple image on each flashcard can also be helpful. Auditory learners can listen to lectures and read study materials aloud. Hands-on learners may benefit from studying with a partner or a group. If you don’t know anyone currently preparing for the CPA, you can find study groups that meet in your area on online forums or join virtual study groups. If you know a CPA, ask if they are available to coach or mentor you. Any problems you don’t understand, they can show you how to solve them step-by-step. An added benefit of studying with someone else is the accountability component. You are less likely to cancel a study session when you know others are counting on you.


The AICPA offers many valuable resources to help students succeed, such as the CPA Exam Blueprints, which thoroughly outline all exam content. Sample tests are also available with practice questions to help familiarize students with the test format. These tests also give candidates the opportunity to practice using the technology tools that will be available to them during the actual exam. The research tool can be used during the simulation exercises. Brush up on Microsoft Excel because it is available during the entire exam and can be a valuable tool for solving calculations. There are many other practice exams available online and study guide books.

After taking a practice test, don’t just read the explanations for the correct answer choice, but also why the other options were incorrect. These explanations will give you a more profound knowledge of the content being tested. Don’t limit your resources to just practice tests. There are a variety of podcasts that are informative and entertaining. For example, Next Stop: CPA is a monthly podcast with Q&A sessions, advice, and interviews for those on their journey to becoming a CPA.


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MBA and Master of Accountancy programs typically embed CPA preparation courses into the curriculum because the business school’s ranking is tied to their CPA pass rates. These graduate programs frequently feature specializations in Auditing, Financial Accounting, Forensic Accounting, and Taxation. Classes within these specialty areas of accounting provide excellent preparation and allow students to earn college credits while preparing for the CPA exam. Even if a post-graduate degree is not required for your jurisdiction, it will open additional doors and make a candidate more coveted.

Preparation programs are also offered through private review course providers. Becker, one of the most reputable and largest CPA exam prep agencies, offers innovative and engaging ways to study through task-based simulations, more than 400 videos, the Accounting for Empires game, over 1,400 digital flashcards, as well as synchronous and asynchronous review courses and one-on-one tutorials taught by real CPAs.

Surgent CPA Review is another favorite amongst real CPAs. Surgent was recognized by Accounting Today in 2018 as Top New Products for Accountants. This award-winning prep program prides itself on efficiency. Students enrolled in this program spend an average of just 46 hours per section studying and can thoroughly prepare for a section in as few as three weeks. Customized study schedules are ready for each student, and Surgent courses are designed and taught by first-rate accounting professors. Surgent states they have an 88% pass rate, which is significantly higher than the national average.

Both of these programs offer a free-trial period, so candidates can explore which format is better suited for their study style. Many other programs are also available, so it may be helpful for candidates to speak with CPAs at their firm, college professors, or peers in their accounting classes to get recommendations.

What Does a Career as a CPA look like?

CPAs are highly respected accountants who oversee many financial aspects of a business or individuals. Some of their responsibilities include planning business mergers, managing a company’s budget, preparing grant applications, and helping clients reach their financial goals. CPAs generally work full-time in an office setting. Tax season is a grueling time of the year for CPAs. During peak season, which lasts approximately five months per year, CPAs should anticipate overtime.

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Accounting Firms

CPAs are highly sought after for their expertise in accounting. Deloitte, Ernst & Young, KPMG, and Pricewaterhouse Coopers are referred to as the “Big Four.” Many CPAs aim to work at one of these highly regarded firms, which audit financial statements for the majority of the Fortune 500 companies, such as Amazon, Apple, Berkshire Hathaway, Exxon Mobil, and Ford Motor Co. These four firms have locations worldwide and staff roughly one million employees. CPAs are in high demand because even small companies need financial assistance. CPAs can work in many sectors, including government, non-profit, public accounting, education, and specific industries. The FBI hires CPAs to conduct federal audits and investigate financial fraud. CPAs who speak multiple languages can also work in international business.


According to the Bureau for Labor Statics, the annual median salary for accountants and auditors in 2019 was $71,550. The top 10% of accountants earned more than $124,450. According to NASBA, CPAs may earn up to 10% more than non-CPAs and are better positioned for leadership roles, which generally come with a substantial raise. Senior-level CPAs have opportunities to advance into CEO and CFO positions. Top executives for both small and large companies often earn well into six-figure incomes. Many firms also offer generous bonuses and paid vacation time following tax season. Another benefit that comes with many accounting positions is on-the-job study hours to prepare for the CPA exam, preparation courses, and reimbursement for exam fees.

According to U.S. News, CPAs are ranked 13th among Best Business Jobs and ranked among the 100 Best Jobs. Contributing factors include high upward mobility and above-average flexibility. CPAs may have the option of completing the bulk of their work remotely, creating a harmonious work-life balance.

What are the Future Trends for CPAs and the CPA Exam?

CPA Exam Evolution

The CPA career is continuously changing, and candidates must demonstrate greater knowledge than ever before to tackle the biggest challenges and take advantage of the opportunities of the 21st century. A new CPA exam is currently being formulated and is set to launch in 2024. Students who complete CPA requirements prior to 2024 will be grandfathered in under the current CPA exam, and a transition plan will be in place for those who have started but have not yet completed all four sections of the current CPA exam. Accounting, Auditing, and Taxation will remain the core for the new exam format, with additional emphasis placed on emerging technology. Students will be able to tailor the new exam by selecting a discipline in Tax Compliance and Planning, Business Analysis and Reporting, or Information Systems and Controls. The latest CPA exam will undergo final amendments after a practice analysis is administered.

COVID Impacts

Prometric testing centers were closed for the month of April and had limited site availability in May 2020 due to the coronavirus pandemic. Since the testing window for all four sections of the exam spans 18 months, testing extensions will not be offered. Candidates should use their time wisely to study, attend free webinars, and tune in to podcasts to stay up-to-date on the latest accounting trends. Job seekers can also buff up their LinkedIn profiles and participate in virtual networking events. Joining professional accounting organizations can also spruce up your resume.

Next Steps

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In a time when the economy is still struggling to return to pre-COVID conditions, CPAs can enjoy peace of mind that their profession is experiencing steady job growth. According to the BLS, the projected job growth between 2019 and 2029 is 4% for accountants or approximately 61,700 jobs. Since CPAs have a specialized skill set, they will be the most competitive candidates as new positions become available. If you’ve been on the fence about whether or not to pursue your CPA license, now is a great time to make the decision and schedule your exam date. Recent college graduates should try to test as soon as possible, so the information will still be fresh in their memory.

Scheduling Test Date

There are 55 U.S. Board of Accountancy jurisdictions. Applicants must submit an exam application for the jurisdiction in which they wish to become licensed. Application approval generally takes at least three weeks, so interested applicants should consider this timeframe when applying. Continuous testing launched July 2020, which made testing available year-round, so upon receiving the Notice to Schedule, applicants have up to six months to schedule their test at a time convenient for their schedule. The Uniform CPA exam can be scheduled online through Prometric. Test sites are available across the nation. International accountants seeking CPA certification may take the International Qualification Examination at locations throughout the U.S., Canada, and many other countries.

Test Day

While it might be tempting to get in one final cram session the night before the exam, you should take the evening off and relax. On test day, candidates should arrive at the Prometric test center 30 minutes early with a valid government-issued ID, confirmation number, and must wear a mask (until COVID precautions have been lifted). All personal items, including a jacket, will be required to be placed in a locker, so you may want to wear long sleeves. An optional 15-minute break may be taken after the third test-let, but students will not be allowed to return to any previous test-lets after the break. This break will not count as part of your testing time, so it can help prevent fatigue. It can also give test-takers a chance to assess their pace and determine how long they can spend on the remaining two test-lets. For any other questions regarding test day, contact the Prometric test center location where you are scheduled to test.

Receiving Scores

Scores are generally released within two weeks from the date a student took the exam. Students who don’t pass a section have an 18-month window from the date their first section was administered to retest. There is currently not a limit to the number of times a student may retest. If you don’t pass a section the first time, don’t get discouraged. Many successful CPAs also had to retest one or more units.



Congrats on completing one of the biggest challenges in your career as a CPA! You must now wait to receive your official CPA congratulatory letter. As you wait, fill out your CPA license application and submit it along with any documentation required for your jurisdiction, such as verification of work experience. Finally, go celebrate, update your resume with your CPA designation, and land your dream job!

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Ready to start your journey?

Ready to start your journey?